Morningstar

Prada: Solid Revenue Growth on Improved Brand Momentum

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Securities In This Article
Prada SpA
(01913)

We are increasing our fair value estimate for Prada 01913 to HKD 48 from HKD 38 as we incorporate full-year 2022 results and first-quarter revenue into our models. Around 15% of the fair value estimate increase stems from currency moves and time value of money, while the rest is driven by our assumptions for stronger near-term growth helped by brand momentum and faster margin scaling. We still view shares as expensive at current levels.

Sales momentum continued strongly in the first quarter, up 22% for the group, with a strong showing in Europe (28%) and Asia (22%), and still positive albeit slower growth in the Americas with a 5% increase. Prada’s revenue growth in the quarter was at the higher range of previously reported peers (only Moncler, Hugo Boss, and Hermes had stronger revenue growth). Miu Miu’s performance accelerated remarkably to 42% growth, while Prada brand revenue was up 21%. The ready-to-wear and footwear categories led growth, boosted by brands’ fashion momentum (and hence could be volatile), but leather goods also grew strongly at 14%.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Jelena Sokolova, CFA

Senior Equity Analyst
More from Author

Jelena Sokolova, CFA, is a senior equity analyst, Europe, for Morningstar*. She covers the consumer discretionary/luxury goods sector. She is a lead analyst for the sector, performing in-depth fundamental analysis and DCF modeling resulting in investment ideas tailored to long-term investors and analyzing the durability of company competitive advantages based on Morningstar proprietary “moat” methodology. Since 2023 she is a member of the Moat Committee, assessing competitive strengths across sectors.

Before joining Morningstar in 2016, Sokolova worked as a senior equity analyst at CE Asset Management in Zurich covering European large caps. Having started as an analyst for CE Asset Management office in Riga in 2010, Sokolova got promoted to a Senior Analyst position in 2013 covering European Large cap stocks with a generalist focus, reporting to CE Asset Management Investment Committee.

Sokolova holds a bachelor’s degree in Business Administration from the Banking Institution of Higher Education, Riga. She also holds a a master's degree in international business from Riga International School of Economics and Business Administration. She also holds the Chartered Financial Analyst® designation.

* Morningstar UK Ltd (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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