[ET Net News Agency, 29 January 2020] Morgan Stanley lifted its target price for Prada
(01913) to HK$30 from HK$23 and maintained its "equal-weight" rating.
The research house said its channel checks suggest that Prada sales momentum has
improved over the past few months, with a sequential acceleration over the last part of
2019 and a further improvement in the first weeks of 2020.
While profitability is likely to remain subdued in FY2019 (9% EBIT margin) given the
ongoing initiatives to reduce markdowns and re-size the wholesale distribution network,
Morgan believes the market will look through these short-term headwinds over the upcoming
results in March and focus on the improved sales momentum, particularly given the fact
that the brand is seen as the one with the highest recovery potential in the luxury
universe. (KL)