Kering (PRTP.PA) Risk Reward Update: Turnaround proving long and complex

Following Kering's 3Q results, Morgan Stanley lowered its 2026-28 EPS estimates and cut its price target to €220 from €250, with bull/base/bear cases reduced to €350/€220/€120 from €370/€250/€130. The stock closed at €213.50. The team maintains an Equal-weight rating and an In-Line industry view. Valuation is DCF-based, assuming a 9.9% WACC and 2.75% long-term growth. Morgan Stanley believes Kering's turnaround remains a work in progress and is largely priced in; a continued organisational revamp and greater conviction in Gucci's turnaround could be key catalysts to turn positive on the shares. EPS estimates are €6.15/€8.07/€10.59 for 2026/27/28.