Moncler Shares Surge After Goldman Sachs Upgrade

Shares of luxury brand Moncler jumped over 5% after analysts at Goldman Sachs upgraded the stock to a "buy" rating, citing attractive valuation levels and robust growth potential despite challenges in the broader luxury market.

The analysts set a price target of €58.7, flagging a potential upside of 23%, making a compelling case for the stock as a premium yet undervalued player in the luxury sector.

Moncler's recent pullback has opened what Goldman describes as a "unique entry point" into a high-quality growth opportunity.

The brand, known for its high-end outerwear and collaborations, is currently trading at 20 times its 2025 projected earnings—below its historical average and at a discount compared to the broader luxury sector, which trades at 24 times forward earnings.

In a challenging luxury environment, particularly in China, Goldman noted Moncler's strong margin defensiveness as a key differentiator.

With group margins around 30%, Moncler has a flexible cost structure, allowing the brand to adapt its spending on projects and marketing based on market conditions. This approach not only helps protect earnings during slower growth periods but also mitigates the risk of margin erosion.

While the global luxury market is expected to stagnate in 2024, with growth predicted at 0% in constant exchange rates, Moncler's ability to maintain profitability positions it well to weather the storm, analysts said.

Moncler has demonstrated an ability to outpace sector growth, driven by its innovative product offerings and marketing initiatives. The company’s Genius collaborations and high-performance Grenoble line have been cited as key drivers of consumer interest.

Upcoming events, including showcases in Shanghai and St. Moritz, are expected to further solidify the brand’s position in the market.

Additionally, Moncler’s relatively small global retail footprint—285 stores compared to an average of 330 among peers—provides significant room for expansion.

Goldman identified the U.S. as a particularly promising market, noting that Moncler's revenue from the Americas accounted for just 14% of its total in 2023, compared to a 23% average for luxury peers.

While Moncler has faced challenges in the Chinese market, with growth decelerating in recent months, Goldman analysts remain optimistic about its long-term potential. The brokerage expects China to continue being a structurally important market for luxury brands, supported by Moncler’s brand momentum and planned store openings.

The stock's recent underperformance—down 10% over the past six months compared to the broader luxury sector—has created an attractive entry point, according to Goldman. Historically, when Moncler has traded at a discount to the sector, it has tended to outperform over the following year by an average of 9%.

With Moncler poised for above-sector growth in 2025, supported by retail expansion and its strong brand identity, Goldman’s analysts argue the stock offers significant value at its current price.

The note also flags the company’s proven resilience and ability to capitalize on opportunities in a challenging environment.

Moncler’s 12-month price target remains €58.7, based on a blend of long-term earnings growth and valuation methodologies, including discounted cash flow and forward EBITDA estimates.