Kering Investor Day: it’s all about Gucci, and analysts like what they’re seeing
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Kering Investor Day: it’s all about Gucci, and analysts like what they’re seeing

French luxury titan Kering’s share price was propelled upwards at the end of last week, as investors and analysts responded favourably to the company’s annual Investor Day. What’s gotten everyone so excited – an ambitious approach to iconic brand Gucci’s future, including new guidance figures, and a clear goal. However, some analysts are eager to stress that there’s even more to Kering’s story – and plenty of other reasons to buy the company.

Kering’s share price is up by 42% year to date

graph 1106 kering

SOURCE: Yahoo Finance

Gucci first: Kering has set a new annual sales target for its biggest brand: €10 billion a year. That’s a significant figure, but many analysts have noted that it’s not unachievable. Gucci chief exec Marco Bizzarri was quite clear with journalists that this meant the brand was aiming to take luxury top spot away form rival LVMH’s Louis Vuitton brand: “We’re in the same league,” he said “the question is not if, but when.”

He wasn’t speaking off the cuff. One of the presentation slides that the company showed read that Kering would work to “Re-establish Gucci’s position as a pivotal Italian luxury fashion brand – leading the industry by setting the tone with innovative runway collections and ground-breaking creativity.”

Analysts have reacted positively Gucci’s new sales target and its ambition to be number one in the sector. But some observers are keen to remind us that Kering is a lot more than just Gucci, and that it has plenty to offer elsewhere.

In a note to clients, Berenberg analysts wrote “Kering remains our top pick in the luxury goods sector as we believe there is much more to the story than just Gucci, thanks to the growth opportunities of smaller brands and M&A potential.”

Disclosure

Dominion holds Kering in its Global Trends Luxury Fund.


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The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.