Rating Upgrade and New Targets
BNP Paribas upgraded its coverage of Puig Brands, moving the rating from "neutral" to "outperform". In conjunction with the rating change, the brokerage raised its price target for the Euro‑denominated shares to €20.5, up from the previous target of €18.5. For the American Depositary Receipts (ADRs), the target was increased to $11.7 from $10.8, which, when compared with the prevailing market price of $8.9, suggests an implied upside of approximately 32%.
Valuation Rationale
The upgrade follows an earlier post‑IPO upgrade earlier in the year, which cited a valuation that had become "a shadow of its former self" and a consensus that had been "materially recalibrated" after a management change. BNP Paribas noted that the abandoned Estee Lauder tie‑up had been digested by the market and that the controlling family now appears more open to alternative ownership structures, a development the broker described as "not a bad thing."
Sales Outlook
BNP Paribas projects that like‑for‑like sales growth for the full year 2026 will be roughly 60 basis points ahead of the Bloomberg consensus estimate. The note also references several notable H226 initiatives, indicating that the brokerage expects valuation to continue tracking the trajectory of consensus sales‑growth expectations.
Earnings Outlook
The brokerage estimates that earnings per share (EPS) for 2027 are non‑material for both Puig Brands and its ADR, implying little change from current expectations. For 2028, BNP Paribas forecasts a modest decline in EPS of 1% for both the Euro‑denominated shares and the ADRs.
Overall Implication
The upgrade and revised targets reflect BNP Paribas' view that Puig Brands' valuation has improved relative to peers and that the company's sales trajectory is slightly stronger than market consensus, while earnings are expected to remain flat in the near term with a minor dip in 2028.