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Salvatore Ferragamo: Citi remains Neutral

(AOF) – Citi confirmed its Neutral recommendation and its target price of 20 euros on Salvatore Ferragamo. according to the broker, investors will today focus more on new CEO Marco Gobbetti’s detailed five-year plan (until 2026) rather than a retrospective performance in the first quarter of 2022. The broker retains several key points. First point: more creative product content led by designer Maximilian Davis, with a more contemporary and relaxed take on Ferragamo’s heritage to appeal to a younger clientele.

Second point: distribution, better retail execution, new store concept, adjustment of wholesale distribution and omnichannel integration.

Third point: more product-centric communication, coherent storytelling and social media.

The broker points out that management’s financial targets include a doubling of the revenue base by 2021 (implying an annual sales growth rate of +15% over 5 years, mainly thanks to the price / product mix ratio and volumes , with an acceleration of growth from 2023) and a significant expansion of the Ebit margin, which could reach the peak of the margins of the years 2014-2016, i.e. 18%, by the year 2026. This figure is well above the consensus.

Equities have underperformed year-to-date and over the past five years as multiple recovery attempts failed. Citi thinks it might be different this time around.


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