UBS Group predicts that Prada (01913) will have the lowest operating leverage in the first half of the year, while the profit margin will further expand in the second half of the year.
Zhongtong Finance app learned that UBS released a research report stating to reiterate the "buy" rating on Prada (01913), lowering the target price from HKD 76.5 to HKD 73.5. The company's performance in the first quarter was strong, and with the structural bullish support of strengthening product innovation, marketing initiatives, and RTW categories, we believe that Prada will continue to maintain a strong brand momentum in the second quarter.
The bank believes that Prada is a good example of successful turnaround in the industry and has room for revaluation. The bank maintains its basic forecast for Prada and expects group retail sales to increase by 14% in the second quarter. In addition, considering the phased marketing investment, UBS predicts that the company's operating leverage in the first half of the year will be at its lowest, while the profit margin will further expand in the second half of the year. Compared with peers, Prada's sales will continue to maintain a leading position, the profit margin will steadily increase, and the growth space will further support the sales in the second half of the year.