Prada SpA, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Luca Solca from Bernstein upgraded the rating on the stock to a Buy and gave it a HK$58.00 price target.
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Luca Solca’s rating is based on several compelling factors that suggest a positive outlook for Prada SpA. Despite recent pressures on Prada’s share price and valuation, which have underperformed compared to industry peers, the company has consistently delivered above-average organic growth over the past eleven quarters. This indicates a strong underlying business performance that is not fully reflected in the current stock price.
Furthermore, Solca points out that the current valuation appears overly pessimistic, particularly concerning potential losses from the Versace turnaround. The market seems to have overestimated these losses, providing an opportunity for valuation correction. Additionally, recent changes in shareholder structure, with a significant non-family shareholder reducing their stake, have alleviated technical pressures on the stock. This situation presents a margin of safety for investors, making Prada’s stock an attractive buy opportunity as valuations are expected to realign with the company’s fundamental strengths.
In another report released on November 1, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a HK$52.00 price target.