Gucci owner's shares rise after Valentino deal postponed. Is it worth buying them?

Shares of French luxury holding Kering, which owns the Gucci brand, rose by more than 2% in trading on September 11. Investors positively assessed the postponement of the full buyout of the Valentino brand: it was perceived as the first steps of the new CEO, who came from Renault, to revitalize the business and reduce debt. Analysts still maintain neutral assessments and reserved forecasts for the share price.

Shares in French group Kering, which owns the Gucci, Saint Laurent and Balenciaga brands, were up by at least 3% in Paris trading on Thursday after the postponement of the Valentino buyout.

The decision was the first major move by Kering's new CEO Luca de Meo, who has been tasked by shareholders with returning the troubled business to success, Reuters noted.

"We must continue to reduce our debt, reduce our costs. And if necessary, rationalize, reorganize, reposition some of our brands. These decisions will not always be easy," the top executive said on Sept. 9, he was quoted by Reuters as saying.

Reducing Kering's debt is the first task de Meo faces, according to Bloomberg columnist Andrea Felsted. The company's year-end debt load is estimated at €8.9 billion, 3.3 times its projected 2025 earnings before interest, taxes, depreciation and amortization (EBITDA), Felsted cited HSBC analyst Erwan Rambour as saying.

Kering's market value is virtually unchanged relative to the beginning of 2025. But they are up 37% in the last three months.

Kering has postponed a possible full buyout of Italian fashion house Valentino from Qatari fund Mayhoola until at least 2028-2029. Initially, the company could realize this right by 2026-2028, but new conditions have shifted the timeline: Mayhoola will only be able to sell the remaining 70% stake in 2028-2029, while Kering will only be able to finalize the deal in 2029.

On the eve, September 10, two analysts confirmed neutral position on Kering securities. Thus, RBC kept the recommendation to hold its shares, setting the target price at 220 euros. The bank's assessment assumes a fall in the company's shares by almost 6%.

Bernstein also reiterated its advice to hold the luxury brands owner's shares, keeping its target price at €180. His valuation implies a 30% drop in the stock.

In early September, an HSBC analyst advised investors to buy Kering shares. The bank expected sales to recover this year and return to sustainable growth in 2026.

Of the 23 analysts tracking Kering, only four advise investors to buy the stock (Buy and Outperform ratings), according to MarketScreener. Five recommend selling them, and the remainder recommend holding them in a portfolio.

This article was AI-translated and verified by a human editor