Investing.com -- Barclays (LON:BARC) has adjusted its stance on Moncler (BIT:MONC), downgrading the luxury brand to an "equal weight" from an "overweight" rating.
This revision reflects analysts’ concerns over the brand’s limited immediate growth catalysts and ongoing challenges in key markets.
This comes amidst a cautious 2025 outlook for the European luxury goods sector, which Barclays projects to grow modestly by 2%, primarily driven by the U.S., while China remains a drag.
Moncler faces mounting pressures from slowing retail momentum and a challenging environment in its core Chinese market.
Analysts noted that the brand’s recent performance has become reliant on retail space expansion, as same-store sales growth turned negative.
Compounding the issue, Moncler has limited exposure to the U.S., a market expected to drive much of the sector’s growth in 2025.
Only 14% of the brand’s sales are attributed to the Americas, and expansion plans in the region are expected to take time to materialize.
The downgrade also points to muted progress with Moncler’s Stone Island subsidiary, acquired in 2021.
While Moncler aimed to elevate Stone Island’s profile, the brand’s financial targets for 2024 are falling short, with revenues estimated at €400 million compared to an ambitious €500 million goal.
Barclays has lowered its price target for Moncler to €56 from €61, underscoring a more cautious view on the brand’s near-term potential.
However, the analysts recognize that Moncler benefits from a disciplined operational approach and a relatively resilient EBIT margin compared to peers.
Despite the downgrade, the analysts leave room for upside if the brand manages to regain momentum in China or successfully leverage new growth drivers, such as its non-outerwear lines and Moncler Grenoble.