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Investing.com -- Bernstein Research initiated coverage on Brunello Cucinelli and Salvatore Ferragamo, offering contrasting outlooks reflective of their brand positioning and strategic execution.
Brunello Cucinelli received a “market perform” rating with a €118 price target. Bernstein describes it as “the closest the luxury industry has to a cult,” due to its community-driven ethos centered in Solomeo, “Humanistic Capitalism,” and focus on about 500,000 high-net-worth individuals (HNWIs).
The brand avoids entry-level products, prominent logos, and evergreen icons, aiming instead for customers to adopt the full ’Cucinelli look.’
This niche approach supports pricing power—average tickets range from €1,500–€2,000, despite a marketing budget approximately 1% of LVMH’s.
While this exclusivity buffers macroeconomic risks, Bernstein identifies six structural tensions limiting further upside: heavy reliance on founder Brunello Cucinelli (key man risk), fashion dependency without timeless products, high SKU complexity, low store productivity, and subscale operations. These factors, Bernstein argues, prevent Cucinelli from achieving “Italian Hermès” status.
Cucinelli is forecast to grow top-line at around 10%, with Bernstein’s projections in line with FY25 consensus and 1% above for FY26 and FY27.
The stock is seen as “priced to perfection,” trading at a 3.5x Target (NYSE:TGT) Relative P/E, second only to Hermès at 4x, placing it in Bernstein’s "quality bucket."
Salvatore Ferragamo, by contrast, was rated “underperform” with a €3.40 price target. The brokerage flags a gap between the brand’s rich legacy and its inconsistent, commoditized product mix.
The current assortment,’a mix of old and new, good and bad,’ lacks a coherent identity, leading to low store productivity (€2.8M per store) and high inventory levels (30% of sales).
Ferragamo’s pricing places it in direct competition with mega-brands, with shoes at around €700 and ready-to-wear at about €1,500, while its marketing budget remains at just 1% of LVMH’s.
Efforts to reposition have been hampered by frequent executive turnover; with no current CEO, Bernstein expects no meaningful change before Spring/Summer 2027 Fashion Week, with potential results seen only in 2027.
Revenue projections lag consensus by 6% in FY25, 5% in FY26, and 7% in FY27. Bernstein places Ferragamo in its “value bucket” and expects the company to remain loss-making in FY25.
It assigns a 1.15x EV/Sales multiple, second lowest among peers, ahead of only Swatch at 0.91x. The report also sees limited potential for mergers or acquisitions in the near term.