Gold prices hit 4-month high on Fed easing hopes, tariff uncertainty
Investing.com -- UBS has upgraded Puma SE to “neutral” from its previous “sell” rating, raising its 12-month price target to €20.9 from €16.3, in a note dated Friday.
The brokerage said that while Puma’s fundamentals remain weak, sentiment has shifted due to speculation surrounding Artemis’ potential sale of its 29% stake in the German sportswear company.
UBS noted that the market is likely to focus less on near-term earnings pressure and more on ownership developments, which may limit downside risk to the stock.
The analysts explained that Puma continues to face structural challenges, including a required cleanup of its wholesale channels that could take at least a year, a reset of its product pipeline, and the likelihood of higher investments to revive brand momentum.
UBS projects Puma’s EBIT margin at just 0.6% in 2025, rising modestly to 1.3% in 2026, with a return to mid-single-digit margins only by 2029. Net earnings are expected to swing to a €230 million loss in 2025 before gradually recovering.
Despite the near-term weakness, UBS said expectations ahead of Puma’s upcoming strategy update are low, which means even modest progress could be welcomed by investors.
Measures such as focusing on entry-level price points, reinvesting in marketing and product development, and suspending dividend payouts could help improve the company’s positioning. UBS estimates that no dividend will be paid until at least fiscal year 2026.
The upgrade in rating was also tied to a change in valuation methodology. UBS shifted from a pure discounted cash flow model to a blended approach, using a 50/50 mix of DCF and EV/sales.
This adjustment lifted the price target to €20.9, closer to Puma’s current trading price of €20.68 as of Aug. 28.
“With the current valuation levels already at a multiyear trough, the downside risks appear limited, leaving the risk/reward more balanced,” UBS said.