Kering downgraded over Gucci

Morgan Stanley cut Kering to “equal-weight” from “overweight” on April 13, saying Gucci’s recovery still looks uneven and the stock’s near-term upside is limited. (invezz.com) The downgrade landed two days before Kering’s April 15 Capital Markets Day and just after the group’s scheduled first-quarter 2026 revenue publication window opened on April 13 after market close. Morgan Stanley also lowered its price target to €320 from €330, according to reports on the note. (kering.com) (coincentral.com) Kering shares fell more than 3% on April 13 after the call, reversing part of a rally that had pushed the stock to its highest level of 2025 on optimism around new chief executive Luca de Meo. Reuters reported that investors had been betting de Meo could stabilize the group after years of underperformance. (msn.com) (uk.finance.yahoo.com) The pressure point is Gucci, Kering’s biggest label and former profit engine. Reuters reported on April 14 that Gucci’s sales have nearly halved from their peak under former creative director Alessandro Michele, putting the brand at the center of this week’s investor test. (money.usnews.com) Kering’s own 2025 results showed how much ground remains to recover. Group revenue fell 13% to €14.675 billion in 2025, recurring operating income dropped 33% to €1.631 billion, and recurring net income attributable to the group was €532 million. (kering.com) The fourth quarter offered only partial relief. Kering said fourth-quarter 2025 revenue fell 9% as reported and 3% on a comparable basis, while CNBC reported Gucci’s sales plunged 24% in that period even as the group slightly beat analyst forecasts. (kering.com) (cnbc.com) Kering has already tried a creative reset at Gucci. The company said on March 13, 2025 that Demna, who had led Balenciaga since 2015, would become Gucci’s artistic director starting in early July 2025. (kering.com) Management has also been reshaping the balance sheet while buying time for the brand overhaul. Reuters reported that de Meo, who took office on September 15, 2025, has sold assets, delayed a fuller Valentino acquisition and agreed to sell Kering Beauté to L’Oréal for about €4 billion. (kering.com) (money.usnews.com) Kering said on February 9 that 2026 should bring a return to growth and margin improvement, and it promised a “clear roadmap” at its April 16 investor event. Morgan Stanley’s downgrade shows investors want that roadmap backed by cleaner numbers at Gucci, not just another reset story. (kering.com) (invezz.com)