Goldman Sachs Sees Uncertain Future for Kering Despite Recent Recovery

Goldman Sachs has initiated coverage on Kering SA with a neutral rating and a price target of EUR250.00. The stock, currently trading at $23.73, is near its 52-week low of $23.52 and has dropped 32% year-to-date. Despite these challenges, InvestingPro analysis suggests the stock is undervalued, placing it among the platform’s Most Undervalued list.

The investment bank expressed uncertainty about Kering’s turnaround prospects, particularly for its flagship brand, Gucci. Gucci’s sales have declined more than 40% from 2022 to 2025 after a period of exceptional growth from 2016 to 2022. Goldman Sachs attributed this downturn to consumer confusion during a brand repositioning and muted luxury sector traffic.

Goldman Sachs noted that Kering’s management overhaul, including the appointment of an external Group CEO, could bring stability and fresh perspectives. However, the bank emphasized that Gucci’s performance varies by region, with strong results in the Americas but weaker appeal elsewhere. Notably, Kering’s management described the brand as “broken” in China.

Despite recent struggles, Kering reported a significant turnaround in its second-quarter performance, marking its first growth in 12 quarters. The company’s first-half revenue reached EUR 7.2 billion, reflecting a 1% increase on a comparable basis. Recurring operating income rose to EUR 921 million, achieving a 12.8% margin, while debt levels fell sharply, strengthening its financial position.