Citi: Raises PRADA (01913) target price to HK$41.5, maintains "Neutral" rating.

Citi issued a research report stating that PRADA (01913) saw an improvement in same-store sales trends for the brand in the second quarter, Miu Miu continued to normalize its growth, and the group's EBIT margin showed resilience after excluding the impact of foreign exchange and Versace. The bank raised its target price for PRADA from HK$38 to HK$41.5, maintaining a "Neutral" rating. The bank broadly maintained its sales forecasts for PRADA for fiscal years 2026 to 2028, with sales forecast to grow 4.4%, 4.1%, and 4.1% respectively at constant exchange rates. Due to the dilution effect from foreign exchange and the consolidation of Versace being greater than expected, Citi lowered its gross margin forecasts, cutting its EBIT forecasts for fiscal years 2026 to 2028 by 2%, 3%, and 3% respectively, and its earnings per share forecasts by 3%, 5%, and 4% respectively. The bank expects EBIT margins of 19.6%, 20.1%, and 20.8% for fiscal years 2026 to 2028 respectively, and excluding the impact of Versace, margins would expand by 10 basis points.