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Kering shares rise as analysts like its upbeat Gucci sales target

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Kering shares are higher Friday following its Investor Day where it shared a new target of €10 billion sales per year for its Gucci brand. Financial analysts made a generally positive response to that outlook, saying it was achievable and possibly already priced into the stock.

By 1205 BST, Kering shares were 3.20% higher at €494.00. The stock has been moving generally higher since its upbeat earnings release in April.

Kering’s Gucci sales target

Speaking to an audience at its Investor Day in Florence, Thursday, one of Kering’s upmarket fashion brands, Gucci, said it aims to propel its brand back to the top of the market ahead of LVMH’s Louis Vuitton.

“We’re in the same league … The question is not if, but when,” Gucci Chief Executive Marco Bizzarri told journalists, Thursday, according to a Reuters article.

One of the presentation slides it showed at the event read stated that it 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.”

The luxury brand also made it clear it is targeting revenues of €10 billion, per year. It added that there was a broad range of ways in which Gucci could achieve that level of sales.

Analysts broadly upbeat on Gucci target

Following Gucci’s disclosure of its sales target, analysts have been broadly positive on the Kering stock.

“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,” Berenberg analysts said in a research note to clients.

In addition, while HSBC analysts said the target was achievable and others stated that was already priced into the stock. However, BNP Paribas suggested that a more subdued sales backdrop for H2 2018 was being priced in by some investors.

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