Citigroup: Lower PRADA (01913) target price to HKD 52.3, rating "Neutral"

Citi analysts released a research report stating that the sales, EBIT, and earnings per share forecast for PRADA (01913) in 2025 and 2026 have been reduced by 4%, 6%, and 6% respectively, reflecting slightly lowered revenue growth expectations, unfavorable foreign exchange effects, and continued operational and capital expenditure investments. The target price has been lowered from HK$59.8 to HK$52.3, with a "neutral" rating. The bank stated that at fixed exchange rates, PRADA's revenue grew by 17% last year, outperforming the industry average, and also increased by 13% in the first quarter of this year. However, the growth mainly came from MIU MIU, while the core brand Prada further slowed down. The management's focus on "growth first" philosophy requires more significant investments in advertising, manufacturing, and IT infrastructure. Additionally, the group plans to increase the store area of MIU MIU by 10 to 15% and Prada by 2 to 3% from 2025 to 2026, which the bank believes will limit the potential for EBIT profit margin expansion.