Mackenzie: Initiate "Outperform" rating on PRADA (01913), target price raised to 86 Hong Kong dollars.

Morgan Stanley released a research report stating that it has raised its net profit forecast for PRADA (01913) for the years 2024 to 2026 by 0.7%, 0.7%, and 3.5% respectively, to reflect the strong performance of Miu Miu, the resilience of Prada, and improving operating leverage. The target price has been raised from 70 Hong Kong dollars to 86 Hong Kong dollars, with a rating of "outperform the market". The bank expects PRADA's revenue in the fourth quarter of last year to increase by 15% year-on-year, primarily driven by the strong performance of Miu Miu and Prada's resilient performance in various regions. The bank anticipates a 20% year-on-year increase in the company's operating profit in the second half of last year, mainly due to operating leverage and a favorable brand portfolio. The bank believes that Miu Miu still has plenty of room for growth, noting that as of the first half of last year, the brand only had 139 stores globally, far fewer than Prada's 417 stores.