Goldman Sachs Starts Kering Coverage With Neutral Rating

Goldman Sachs has initiated coverage on Kering SA with a Neutral rating and a price target of EUR 250.00. The stock, currently trading at $23.73, has dropped 32% year-to-date and is near its 52-week low of $23.52. Despite these struggles, InvestingPro analysis suggests the stock is undervalued and lists it among opportunities on its Most Undervalued list.

The investment bank expressed uncertainty about Kering's turnaround, particularly for its flagship brand Gucci, which faces macroeconomic pressures and competitor challenges. Gucci's sales plummeted by more than 40% from 2022 to 2025 after a period of exceptional growth. Goldman Sachs noted that Gucci's brand repositioning led to consumer confusion during a sluggish luxury sector period.

Kering's management overhaul, following the appointment of an external Group CEO, could bring stability and fresh perspectives. However, Gucci's performance varies globally, with strong results in the Americas but weaker appeal elsewhere. Analysts predict the company will return to profitability this year, despite recent losses. In China, the brand is reportedly broken, though management is exploring new approaches.

Recently, 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, a 1% increase on a comparable basis. Recurring operating income rose to EUR 921 million, achieving a 12.8% margin. Debt levels also fell sharply, strengthening the company's financial position and encouraging investors.