UBS: Reiterates "Buy" rating for SAMSONITE (01910), target price raised to 28 Hong Kong dollars.

UBS released a research report stating that SAMSONITE (01910) is rated as a "buy", with the company's net profit forecast for 2024 to 2026 remaining basically unchanged, and the target price raised from HK$27.9 to HK$28. In addition, the bank's revenue forecast for SAMSONITE remains largely unchanged, as weaker than expected sales in the third quarter are expected to be offset by better sales performance in the fourth quarter. The report stated that SAMSONITE's third-quarter performance did not meet expectations, but a turning point may be on the horizon. The company's adjusted EBITDA for the period was $155 million, which was 6% lower than the bank's expectations. The decline in net sales was more significant than expected, with a year-on-year decrease of 7% at fixed exchange rates, compared to the bank's expectation of a 5% decrease, leading to a narrowing of the adjusted EBITDA profit margin by approximately 260 basis points to 17.6%. The bank quoted SAMSONITE's management as saying that sales trends in various regions are improving, with sales expected to be flat year-on-year, meaning fourth-quarter sales are expected to increase by approximately 2% at fixed exchange rates. Given the company's potential for improvement in performance and the market's already low expectations for third-quarter earnings, the bank estimates that the company's stock price will have a moderate positive response after the earnings announcement.