Citi upgrades Puma to 'buy', shares spark

(Sharecast News) - Puma shot higher on Thursday after Citi upgraded the sportswear brand to 'buy' from 'neutral' and hiked the price target to €35 from €27.50. The bank said new deep dive analysis highlighted the potential major mid-term growth opportunity in Greater China following the acquisition of Anta, and driving FY27e/28e sales up +6%/+13% above Visible Alpha consensus.

"We also see meaningful scope for GM expansion, forecasting +240bps/-50bps/+140bps in FY26/27/28e with channel mix, FX, regional mix and promo reduction driving tailwinds, which we believe will more than offset headwinds from sourcing/freight," Citi said.

"Our FY26e/27e GM forecast is +60bps/-60bps versus consensus."

Citi said it assumes a return to profitable growth in FY27, in line with management's guidance, and its EBIT is 12% higher than consensus.

"Our FY26e/27e earnings per share increases by 15/71% given more constructive China growth forecasts and better opex leverage," the bank said.

At 1317 BST, the shares were up 5.5% at €27.89.