UBS: Reiterates Prada "Neutral" rating, target price cut to HK$36.3

UBS issued a research report stating that Prada will announce its third-quarter results on the 22nd of this month. It currently forecasts quarterly revenue of 1.488 billion euros, implying organic growth of about 1%. Prada has effectively managed Miu Miu, and the brand's growth is trending toward normalization, while the Prada brand is also resilient, supporting expectations of a soft landing. Third-quarter direct-to-consumer revenue is expected to reach 1.282 billion euros. However, continued conflict in the Middle East, coupled with softer consumer demand in the United States and China, may weigh on the overall luxury goods industry's performance in the third quarter, according to UBS. UBS noted that Google search trends for the Prada Group's brands have slowed, making it difficult for investors to determine whether the slowdown stems from cyclical industry weakness or the impact of intense market competition, raising questions about growth prospects for the fourth quarter and beyond. The bank continues to view Prada as a potential long-term Italian luxury consolidator, tends to regard this year as a transition year, reiterates its "Neutral" rating on Prada, lowers its target price from HK$39.5 to HK$36.3, and cuts its earnings per share forecasts for 2026 to 2028 by 5%, 8%, and 7%, respectively.