China's revival tempts European luxury, Moncler and Cucinelli fly

(Il Sole 24 Ore Radiocor) - Luxury goods were in the spotlight at the Milan Stock Exchange with Brunello Cucinelli topping the list, followed by Moncler. Yesterday, Brunello Cucinelli released its accounts at market close, which were better than expected and saw revenues for the nine months rise to 920.2 million (+12.4%). It also confirmed a 'healthy growth' forecast of 10% for 2025 and 2026. Equita confirmed the estimates and 'the target at EUR 100 per share. We believe that Brunello Cucinelli's performance this quarter will again prove to be among the strongest in the sector, albeit normalising compared to previous quarters. Moreover, the confirmation of the guidance despite the sharp slowdown in demand for luxury goods testifies to the brand's strong positioning and supports the sustainability of growth".

Brokers confirm the stock at "hold for limited upside and relative valuations versus peers already consistent with the brand's recent period of marked outperformance". Jefferies is of the same opinion, highlighting "the resilience of the brand at a time of increasing pressure in the Chinese luxury cluster in general". In this regard, the analysts point out that geographically, "Asia remained in a healthy expansionary mode at +7.2% in foreign currency terms (versus +8.0%), although it slowed considerably from the 12.8% recorded in the second quarter; China's contribution to growth was slower than expected, but was offset by outperformance in other Asian clusters, including Indonesia and Thailand. We confirm the hold with a target price of EUR 90'.

Apart from individual company news, expectations for new growth stimulus plans in the Chinese economy are also driving the luxury sector in general. Against this backdrop, Salvatore Ferragamo posted a substantial rise, as did Kering and Lvmh on the Cac40.