UBS: PRADA (01913) second-quarter performance exceeds expectations; focus on whether the third quarter can maintain this momentum.

UBS released a research report stating that PRADA (01913) experienced a 7% organic sales growth in the second quarter, surpassing market expectations of around 3%, primarily benefiting from the better-than-expected performance of both its retail and wholesale businesses. Retail sales for the Prada brand grew by 6% year-on-year, higher than the market expectation of approximately 3%. However, the bank believes that based solely on the second-quarter performance, it is still insufficient to significantly alter the current investment outlook. For market sentiment to improve noticeably, the recovery of the Prada brand must continue into the second half of the year. Therefore, if the strong performance can be sustained in the third quarter, it is anticipated that this will lead investors to raise their earnings forecasts for the company and consider potential revaluation. In response to the stronger-than-expected retail sales momentum, UBS has raised its earnings per share forecasts for PRADA for 2026 to 2028 by up to 1%, maintaining a "Neutral" rating and raising the target price from HKD 39.1 to HKD 39.5.