15% dip after solid earnings completely unreasonable
Prada IT
Stock
Stock
ISIN: IT0003874101
Ticker: 1913
IT0003874101
1913
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Discussion about 1913
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8
2Mon·
Everyone is talking about LVMH, but no one is talking about Prada [Stock analysis]
1.brief overview
2.luxury market
3.introduction
3.Prada
4.Miu Miu
5. versace
6. holding structure
7.Valuation
8.Competition (peers)
9.opportunities - risks
10.conclusion
Brief overview
Market capitalization: 14 billion euros
P/E ratio: 17/15
Annualized return: 11% p.a.
Analyst rating: Buy
Luxury market
The luxury market is currently going through a difficult phase: many companies are experiencing stagnating sales and declining profits. The sector still seems to be far from bottoming out. This makes it all the more exciting to see which companies are performing well despite this tense market environment. In addition to Hermès and Ferrari, another luxury company stands out. Prada. The company recently reported double-digit growth. The Prada Group is also not affected by customs duties due to its small presence in the USA. In addition, the luxury sector as a whole is expected to provide a tailwind in the long term with annual volume growth of 4%. A closer look therefore seems to make sense.
Introduction
The Prada Group $1913 (-3.17%) is an Italian luxury fashion company. Prada was originally founded in 1913 by Mario Prada as a leather bag manufacturer in Milan and has since expanded into more and more business areas and countries. Over the years, other brands have been founded and acquired in addition to the Prada brand, including Miu Miu in 1993 and most recently the announced purchase of Versace. Prada Group operates a total of 609 of its own stores, 35% of which are in Asia, followed by Europe with around 32%. The fashion company also has 26 production facilities, 21 of which are located in Italy. The CEO is Andrea Guerra, a former employee of competitor LVMH. Most of the company's turnover of 5.42 billion euros (+15%) is generated through retail sales. The profit margin was 15% in the same year.
Prada
The Prada brand is the most relevant for the company, accounting for 68% of total sales in the first quarter. From dresses to scented candles, there is a wide range of accessories and clothing. The fashion label operates 425 of its own stores and 17 franchises. In the last financial year, Prada increased its turnover by 3.8%. In the first quarter of 2025, however, sales remained constant. A major growth story is therefore not to be expected here. Nevertheless, Prada remains an icon of the fashion industry and a flagship for luxury clothing. Mid-single-digit growth is certainly feasible in the future.
Miu Miu
"Designed as the playful counterpart to Prada, Miuccia Prada used the brand as a creative playground, a space to contrast the minimalist, refined aesthetic of Prada with something more rebellious and free-spirited."
Miu Miu was launched by Miuccia Prada in 1993 and, with 147 stores worldwide, is no longer overshadowed by Prada. The impressive explosive growth in sales began in 2023 with 58% and continued with a further acceleration in the following year. The fashion appeals to young women in particular. Miu Miu stands out from the crowd with extravagant designs. This was fueled by TikTok trends, which increased the brand's popularity worldwide. This enormous popularity is also reflected in the figures: 86% sales growth in 2024 and 12 million followers on Instagram. Despite a slowdown in growth, most recently to 60% in the first quarter of 2025, the potential remains huge.
Furthermore, the rise of Miu Miu does not mean declining margins for the parent company. Although Prada Group does not have the specific margins of Miu Miu, the fact that profits have been rising disproportionately to sales for 4 years means that Miu Miu is probably even slightly more profitable than Prada itself. Miu Miu will therefore become increasingly important for the Prada Group. In 2023, the share of sales was still relatively low at 15%. At the beginning of this year, it was already at 31% and will increase further because the Prada brand is not growing strongly. In the long term, however, Miu Miu's sales growth is likely to level off at between 10-20%. Are there already plans to change the name to Miu Miu Group?
Versace
On April 10, 2025, Prada Group announced that it would acquire Versace, another Italian company, for an enterprise value of 1.25 billion euros. As Versace aims to achieve a turnover of 810 million this year, I think this is a relatively favorable deal. Ultimately, however, it remains a bet on increasing profitability, as Versace has a negative single-digit EBIT margin. Despite everything, the brand will account for around 13% of total sales in future, so I wouldn't attach that much importance to this acquisition. The share price did not react on the day of the announcement.
Holding structure
Prada Holding has almost complete control over the family business with an 80% stake. Miuccia Prada (granddaughter of founder Mario Prada and creative director of Miu Miu) and her husband Patrizio Bertelli (ex-CEO of Prada) are behind the holding company. The remaining shares are in free float. The shares are listed on the Hong Kong Stock Exchange. The number of shares remains constant at 2.56 billion outstanding shares.
Disclaimer
This is not investment advice. These are personal assessments that cannot replace professional advice. If you don't want to miss any further stock analyses from me, please subscribe to my free sub-subscription (link in profile).
Rating
With a P/E ratio of 15, Prada Group is valued much more favorably than LVMH with a P/E ratio of 20, but Prada is expected to grow by around 10% this year, while LVMH is expected to stagnate. In general, analysts believe that Prada will grow faster than LVMH anyway, probably because of Miu Miu. It is therefore not clear to me why Prada has a lower KUVe (2.6) than its competitor (3.4). The same applies to the comparison with Kering.
Ultimately, however, a DCF model is more meaningful for an assessment. For the pessimistic scenario, we take the average FCF margin (10%) from the last 9 years and long-term growth of 2.2%. For the neutral scenario, an FCF margin of 14% and growth of 2.56%. Finally, the optimistic scenario has an FCF margin of 18% and growth of 2.8%. As always, we add a margin of safety of 25% to all values.
Opportunities/risks
Miu Miu is both an opportunity and a risk. On the one hand, if Miu Miu can consolidate its popularity, it will replace Prada as the main source of sales and provide investors with many years of high single-digit earnings growth. On the other hand, Kering shows what mismanagement can cause. Gucci is now shrinking for the third year in a row and there is no end in sight. The share price has fallen 77% from its high. However, the takeover of Versace means that Prada Group is continuing to diversify and its dependence on a single brand is decreasing.
Conclusion
Prada Group is undervalued. An entry could be worthwhile. What you should look out for in future quarterly figures is the further development of Miu Miu. If growth settles between 10 and 20 % in the long term, the share will remain interesting. One should be cautious if Miu Miu's figures show that the brand was just a hype that will disappear as quickly as it arrived.
+ 3
3Mon·
Why I would not invest in LVMH & Co. at the moment
First of all: I don't want to talk down anyone's investments here. Everyone has their own strategy - that is important and right. Nevertheless, I am sharing my personal assessment of luxury stocks such as LVMH, Christian Dior, Moncler, Prada, etc.
In the years 2020 to 2023 - during and after the pandemic - the luxury sector experienced a real boom. Restrictions in everyday life, no restaurant visits, canceled vacations - many people suddenly had more money in their bank accounts that they actually wanted to spend. And what happened? The luxury companies' marketing machines were running at full speed. Influencers, FOMO, exclusivity - luxury became the new must-have.
T-shirts that might cost 1 dollar to produce were sold for 500-1000 dollars. Bags without a logo were suddenly considered worthless. And champagne only Moët, please - nothing else. You either belonged - or you didn't. Clever hype, without question. The companies were delighted. Record sales, new stores, more staff.
But now? Inflation, price rises, economic headwinds. Official inflation may be 0.3-0.4 % - in reality, we are all feeling something completely different. Housing, food, travel - everything is becoming significantly more expensive. And this is having an impact: the middle class, which helped fuel the luxury boom, is slowly returning to its senses. A Gucci shirt for 1000 dollars? No longer bought. Many items end up on platforms second-hand at a 90% discount - in the hope of getting at least a fraction of the money back.
Of course, there is always a small target group that can and wants to afford real luxury - no question about it. But the mass hype? Over in my opinion. Similar to watches, Pokémon cards, expensive wine & whiskey - it was a trend. And trends pass.
The current economic and geopolitical outlook does not exactly point to a new boom in this sector. There is also a growing awareness: Paying $1,000 for a shirt that's already crumbling after seven washes doesn't exactly seem like a smart decision to many, looking back.
I don't want to make a blanket statement here: "Luxury is bad" - on the contrary, I love beautiful things just as much. But for me, it's not an investment, it's a desire, a pleasure - like a nice car or a good watch.
Conclusion: The current weakness of LVMH & Co. comes as no surprise to me. It will be interesting to see what happens next. But my capital is flowing into other sectors for the time being.
$MC (-1.03%)
$MONC (+0%)
$1913 (-3.17%)
$BOSS (+0.11%)
$RMS (-1.54%)
$CDI (-0.45%)
#luxus
#luxusmarken
77
17 Comments
So I like to invest in crises, and not when everything is at the ATH ...
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3030
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5Mon·
Prada plans takeover of Versace | Chinese factories record increase in orders due to customs discussion
Prada $1913 (-3.17%) wants to take over Versace for 1.5 billion . euros: The billion-euro takeover is about to be finalized. Talks between Prada and Versace are already in full swing after an initial comprehensive audit revealed no risks. However, it is possible that both the timing and the value of the deal could still change. Failure of the negotiations cannot be ruled out either. Versace is under the umbrella of the parent company Capri Holdings, which also includes the luxury brands Michael Kors and Jimmy Choo. With the presentation of Versace in the shop window, Capri Holdings is clearly signaling its interest in this iconic brand, which occupies a prominent place in the fashion world.
Meanwhile, Chinese factories are seeing orders coming in as a result of pressure from tariff measures. In February, manufacturers in China reported a surge in orders as importers sought to circumvent the higher tariffs imposed by President Donald Trump. This unexpectedly positive news comes at a time when China's leaders are gathering in Beijing for the annual meeting of the National People's Congress. Lawmakers are expected to support the policies and priorities set out by the ruling Communist Party. This may bring fresh aid to the economy, which is currently heading for growth below 5%. The introduction of an additional 10% tariff on imports from China highlights the uncertainty surrounding the future of the world's second largest economy. Premier Li Qiang will present a work report on Wednesday, which traditionally includes the annual growth target and other important economic updates.
Sources:
https://finance.yahoo.com/news/chinese-factories-see-improved-orders-055439906.html
44
6Mon·
Dates week 3
As every Sunday, the most important news of the last week, as well as the three most important dates of the coming week.
Also as a video:
https://youtube.com/shorts/uFwVbCNGMd4?si=R4ReCZQl2ud6wUW-
Monday:
$9868 (+2.54%) Xpeng and $VOW3 (+0.82%) VW deepen their partnership in China 🇨🇳. Among other things, they are opening up their fast-charging networks to each other. New charging stations are also to be built jointly. VW holds a 5% stake in Xpeng.
$BOSS (+0.11%) Hugo Boss wants to further strengthen the brand and has brought brand expert James Foster on board for this purpose. Foster was most recently head of marketing at Netflix in EMEA and worked at IKEA and Adidas.
https://www.absatzwirtschaft.de/neuer-globaler-marketingchef-bei-hugo-boss-265528/
Inflation is clearly above expectations and is therefore depressing sentiment for the time being. In December, inflation stood at 2.6% Economists had expected 2.4%. The inflation rate is also likely to remain well above the 2.0% target in January. This is due to higher CO2 prices and a more expensive ticket to Germany.
The USA 🇺🇸 puts Tencent on a list of companies that allegedly support the Chinese military. The share loses significantly.
Tuesday:
A cooperation between $NVDA (+0.66%) NVIDIA, $KGX (+0.13%) Kion and $ACN (+0.35%) Accenture to optimize supply chains causes Kion shares to rise significantly. Kion and Accenture are relying on AI from NVIDIA for optimization.
https://www.ariva.de/amp/ki-anwendungen-kion-arbeitet-mit-nvidia-zusammen-11493206
Wednesday:
$TMV (+0.19%) Teamviewer announces via ad hoc that it has exceeded its forecast for the year. Turnover increased by 9% in 2024. In total, it will probably be 671 million euros. The forecast was 662 - 668 million euros. This was mainly due to new billings and significant contracts signed with major customers.
Retail sales have been growing again for 2 years. In real terms, however, the level is still below that of 2021. Compared to the previous month, sales have fallen more sharply than expected. However, the overall consumer mood among Germans is on the rise. The GfK consumer barometer climbed by 1.8 points to -21.3 points.
Donald Trump is calling for more military spending and also wants to annex three countries - Canada, Panama and Greenland. This is not only highly dangerous rhetoric, but above all in the interests of Russia and China, who are planning to do the same with Ukraine and Taiwan. If Trump follows up his words with action, this would put the 'ambitions' of China and Russia into perspective
Thursday:
The Chinese fast clothing delivery service Shein probably wants to go public in the first half of the year. The IPO is planned for London. Shein is headquartered in Singapore.
Friday:
$1913 (-3.17%) Prada is probably planning to take over the Italian fashion house Versace. Versace is currently part of the Capri holding company. A sale of the entire holding company for 8.5 billion euros has failed. Individual brands such as Versace and Jimmy Choo are now up for sale.
The labor market report from the USA is significantly better than expected. This could lead to the Fed lowering interest rates more slowly than previously assumed. The unemployment rate fell to 4.1%, expected: 4.2%. A total of 256,000 new jobs were created, compared to an expected 155,000.
$NLM (-0.25%) Frosta exceeded the profit forecast. As expected, turnover amounted to 638.1 million euros. Profit rose to 42.1 million euros and was thus significantly higher than in the previous year (34.1 million euros). The profit margin was also above expectations at 6.6%.
https://www.4investors.de/nachrichten/amp/boerse.php?sektion=stock&ID=181168
These are the most important dates for the coming week:
🇺🇸
Tuesday: 14:30 Producer prices (USA)
Wednesday: 14:30 Inflation data (USA)
Friday: 15:15 Industrial production (USA)
Can you think of any other dates? Write it in the comments 👇
44
2 Comments
6Mon
Yes...good idea with the Statue of Liberty...then you know it's about the USA....but what do you care about last week's news?
••
10Mon·
Podcast episode 57 "Buy High. Sell Low."
Subscribe to the podcast to keep more net from gross!
00:00:00 Vistra Energy, Constellation Energy, Uranium Energy, Uranium ETFs $VST (+0.65%)
$STZ (+0.62%)
$UEC (-0.42%)
00:37:20 Alibaba, China stocks $9618 (-1.12%)
$700 (-0.86%)
$80700
$1211 (-1.28%)
01:12:00 Exxon, Shell, Diamondback Energy, oil ETFs $SHEL (+0.84%)
$GB00B03MM408
$RDS.A
01:32:00 LVMH, Hermès $MC (-1.03%)
$9988 (-1.56%)
$BABA (-1.74%)
01:42:00 Kering $KER (-0.48%)
01:45:00 Dior, Prada, luxury ETF $CDI (-0.45%)
$1913 (-3.17%)
$AMUN (-0.46%)
01:48:00 Rising social security contributions in 2025 #ampel#money
Spotify
$SPOT (+0.43%)
https://open.spotify.com/episode/44odhfXKc9Do4d6OE6nY3M?si=aXivvFZdSWmn5rOiEk9ElQ
YouTube
$GOOGL (+0.49%)
$GOOGL (+0.49%)
Apple Podcast $AAPL (+0.64%)
#podcast
open.spotify.comFolge 57: Alibaba, LVMH, Shell, Vistra, Exxon, Hermes, Diamondback, Constellation Energy, Kering, Dior, Uran, China, Luxus, Öl
1111
1Yr·
Wanted to share my portfolio with you. Been investing since May 2020. 25 years old, full-time job and I buy and sell cars from time to time. Have a mix of growth stocks and dividend stocks. This year I will invest more outside the US to reduce the US share a bit. I will mainly $D6H (+0%)
$YSN (+0%) buy more. New additions will be: $WKL (-3.14%)
$1913 (-3.17%)
$CNQ (+0.25%) After all the purchases have been made, I will increase all positions below 1k.
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