The Zhitong Finance App learned that UBS released a research report stating that it reaffirmed Prada's (01913) “neutral” rating, lowered the target price from HK$39.5 to HK$36.3, and lowered the 2026-2028 earnings forecast per share by 5%, 8% and 7%, respectively.

Prada will announce its third quarter results on the 22nd of this month. Currently, it predicts quarterly revenue of 1,488 billion euros, or an endogenous increase of about 1%. The bank pointed out that during the year, Prada effectively managed Miu Miu. The brand's growth trend was normalized, and the Prada brand is also resilient, supporting soft landing expectations. Direct to Consumer (DTC) revenue is expected to reach 1,282 billion euros in the third quarter. However, the ongoing conflict in the Middle East, combined with weak consumer demand in the US and China, UBS anticipated or dragged down the overall performance of the luxury goods industry in the third quarter.

According to UBS, the Prada Group brand Google search trend is slowing down, and it may be difficult for investors to determine whether the slowdown is due to the impact of cyclical industry weakness or fierce market competition, and raises questions about the growth prospects for the fourth quarter and beyond. The bank continues to view Prada as a potential long-term Italian luxury integrator and tends to see this year as a transition year.

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