Barclays cuts Moncler price target on slowing brand momentum

Barclays has lowered its price target on Moncler to €61 from €63, projecting slower Q2 organic growth of +1% and a -1% decline for the Moncler brand due to weakening tourist flows and macroeconomic uncertainty. The firm anticipates a -280 basis point drop in Moncler's H1 EBIT margin to 18.2% due to operating deleverage and increased advertising spending, leading to a -5% cut in the FY25 adjusted EPS forecast, while maintaining an "equal weight" rating on the stock.

Analysis

Barclays has revised its outlook for Moncler, lowering the price target to €61 from €63, citing signs of decelerating momentum in the core Moncler brand and a weaker forecast for Q2 2025. The bank projects a marginal +1% constant foreign exchange (cFX) group organic growth for Q2, with the Moncler brand anticipated to decline by -1% cFX. This contrasts with a more optimistic projection for the Stone Island brand, which is expected to grow +9% cFX in Q2, recovering from a -5% cFX decline in Q1. The overall slowdown is attributed to softening tourist flows, particularly from Chinese and American consumers, impacted by unfavorable foreign exchange movements and ongoing macroeconomic uncertainties. Geographically, Europe is expected to see a -3% cFX decline in Q2, Asia is forecast to be flat (a notable slowdown from +6% cFX growth in Q1), and the Americas are projected to fall -2% cFX. Moncler's Direct-to-Consumer (DTC) channel growth is expected to be flat year-over-year in Q2, a significant cooling from the +4% cFX growth in Q1, while the wholesale channel is forecast to drop -8% cFX, aligning with company guidance. Profitability is also expected to be impacted, with Barclays forecasting Moncler’s H1 EBIT margin to decrease by 280 basis points year-over-year to 18.2%, driven by operating deleverage, a higher advertising and promotion spending ratio (10% versus 8% in H1 2024), and the absence of a €7.5 million one-off gain recorded in the previous year. Consequently, Barclays has reduced its FY25 adjusted earnings per share forecast by -5%, though it maintains an "equal weight" rating on the stock, highlighting a lack of immediate positive catalysts.

Key Decisions for Investors

• Investors should closely monitor Moncler's H1 2025 results, due July 23, for confirmation of the anticipated Q2 sales deceleration and margin compression.
• A cautious stance may be warranted given the projected slowdown in the core Moncler brand, weakening tourist demand, and increased operating expenditures impacting profitability.
• Particular attention should be paid to regional performance, especially in Asia, and the evolving impact of foreign exchange rates and macroeconomic conditions on consumer spending.
• The divergent growth trajectories forecasted for the Moncler and Stone Island brands suggest investors should assess the strategic implications and relative contributions of each brand to overall group performance.