Analysts bullish on Hugo Boss AG following recent share price decline

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Analysts bullish on Hugo Boss AG following recent share price decline
Credit: © Reuters.

Hugo Boss AG (BOSSY) was raised to Buy by analysts at both BofA and Deutsche Bank on Wednesday.

Analysts at BofA maintained a €75 price target on the stock, noting that the shares are down over 20% since the peak in July, given concerns about luxury sector normalisation, the financial health of European consumers, and the state of the apparel retail market going into 2024.

"We believe that continued outperformance and solid current trading amid normalisation indicate that Boss continues to enjoy idiosyncratic tailwinds thanks to execution of its CLAIM 5 strategy, allowing it to take market share globally," said the analysts.

"The stock now trades at 12x P/E '24E, a c.30% discount to its own historical valuation and the lowest since the COVID pandemic, which we view as unwarranted given a 23% EPS 2023-26E CAGR."

Analysts at Deutsche Bank maintained a €79 per share price target on the stock.

The analysts commented that market concerns have proven too pessimistic, and Hugo Boss shares are now lower "despite growing double digits, overcoming the more difficult trading environment."

It outperforms important peers by investing in its brands and keeping up the brand heat," the analysts wrote. "Based on this, the company continues to improve its space productivity, gain market share and win selling space at important retailers."

"As wholesale orders continue to be up double-digits, we expect this winning streak to continue. HB remains a growth story, but we think operating leverage will become more important," concluded the analysts.

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