The analysis firm Alantra Equities begins this week to cover Puig, the company that owns companies such as Carolina Herrera, Paco Rabanne or Jean Paul Gaultier, among others. with a valuation of 26.45 euroswhich is the second-lowest valuation among companies tracking the high-end beauty company’s performance on the stock market and also below the average consensus price target of Bloomberg.
The average valuation of Puig is 29.14 euroswhich leaves it with a potential upside of 14% from current levels, as it is currently trading in the 25 euro area. Morningstar is the one that gives it the lowest price target, of 23 euros. Thus, in addition to Alantra, Banco Santander and CaixaBank also start monitoring Catalan stocks this week, with valuations of 30.50 euros and 34.20 euros, the latter being the highest price target.
The Catalan high-end beauty products company made its stock market debut on May 3 at a price of 24.5 euros per share, the largest placement on the Spanish stock market since Aena’s IPO in 2015. Although in June its shares reached a price of 27.60 euros, July and early August were not as optimistic and fell to around 22.82 euros, also following in the wake of comparables such as L’Óreal, which this month reached the lowest stock market price of March 2023.
However, calm seems to have also won in recent weeks the titles of the luxury segment, which suffered great volatility during the hardest days of decline at the beginning of August. Puig rebounds 9% from the lowest prices and during the year there is an increase of around 2%.
The European luxury segment has also had its ups and downs since the beginning of the year, reaching historical highs on the stock market, then the shares of the companies started to deflate, in parallel with a weaker profit outlook for them. The delayed recovery of the Chinese economy plays an important role, since this country is the main consumer of high-end items.
“Puig could regain revenue momentum and strengthen its market share through 2025 by improving the positioning of its traditional brands and expanding into adjacent categories, aided by the financial flexibility that its IPO will provide. However, sales growth is likely to align with the prestige beauty market this year – after three years of outperforming peers – amid complications related to the transition to the IPO,” say the experts at BloombergIntelligence.
In the same sense, since Bloomberg Intelligence indicate that Puig’s second quarter could mirror the 10% revenue growth recorded in the first quarter, despite the slowdown in the beauty market, “although our concern is that the second half of the year will not maintain the momentum needed to reach the 11% annual growth expected by consensus,” they add. “The expansion in volumes could be moderated by higher marketing expenses by major competitors and by consumer caution, while prices may have to normalize in the face of double-digit growth in the prestige fragrance market,” they say. BI.
