Luxury Overheated, Says Bernstein; Downgrades Kering and Prada
Luxury’s improving fundamentals are “more than reflected” in current multiples, says Bernstein, and takes a “more cautious” stance on the sector.
Short interest down for most luxury stocks, meaning share support from short squeezes has diminished
Swatch and Ferragamo exceptions with more than 10% of free float shorted
LVMH, Ferragamo good picks for investors with 1-2 year investment horizon; for longer-term investors (3 years +) prefer LVMH and Richemont
Downgrades Kering to market perform from outperform as believe Gucci turnaround “almost all priced in”
Downgrades Prada to underperform from market perform as “do not see the good fundamental improvements as strong enough to sustain the current short-squeezed valuation”