A new investment bank joins Puig. Citi initiates coverage on the company and does so by valuing it below the IPO price: sees its action at 23 euros per share, compared to 24.50 with which the company debuted on the Spanish market on May 3.
However, the American firm advises, buy the shares of the Catalan company. With its price target, Citi gives Puig an upside potential of 16% over the next 12 months.
From Citi they explain that “IFragrances are a more volatile category than other beauty segments. However, if we compare this fragrance cycle with the makeup boom in the United States between 2013 and 2016 (both due to low barriers to entry and greater supply outside the home), as well that to more structural changes in consumption patterns, we maintain that the current perfume cycle could still have at least 2 years to develop. » Based on these growth catalysts, They estimate that the category will see annualized growth of 6% in 2025 and 2026.
In addition, they also see possible additional growth of 300 basis points from the improvement of the fragrance portfolio (250 basis points) and the expansion of Charlotte Tilbury (which they value at least 50 basis points) . “This growth strategy stands out in a sector where most of its counterparts are struggling to revive growth (due to the weakness of China, the impact of prices and the slowdown in dermopharmacy in the United States) and gives time for Puig to strengthen its composition and skin care businesses”, they explain.
However, and based on these forecasts, They believe that Puig is bought at a PER (times the profit is reflected in the stock price) 20 times in 2025which represents, according to Citi, a discount of 12% compared to its peers. They believe this reduction is “reasonable given Puig’s shorter history as a listed company”.
