Kering share price has gone parabolic in the past few months, making it one of the best-performing companies in the CAC 40 Index. It has jumped from a low of €147.20 in August to a high of €353 last week, which is a 140% jump. This article explores why the KER stock price has jumped and what to expect.
Kering share price jumped as its turnaround continues
Kering, the parent company of Gucci, Saint Laurent, Balenciaga, and Bottega Veneta, has done well this year. It has moved from being the worst-performer in the CAC 40 Index to one of the best this year.
One of the approaches has been to divest its beauty division to L’Oreal, in a deal valued at over €4 billion. This deal included the House of Creed, a perfume maker that it bought in 2023. Also, the two companies will continue to collaborate on fragrance and beauty products for its brands like Gucci and Bottega Veneta.
In addition to this, the company sold over €1.3 billion in real estate assets. These asset sales will help to reduce its huge €9.5 billion debt.
The other thing that has boosted the Kering share price is its management change. It brought in Luca de Meo as CEO, as it seeks to change its business. De Meo was previously the CEO of Renault Group.
Most importantly, the company, under de MEO, is hoping to stabilize its key brands like Gucci and Bottega Veneta.
Kering earnings were better than expected
The Kering share price has done well after the company published earnings that were better than expected. The most recent results showed that its third-quarter revenue dropped to €3.41 billion, down from the previous €3.786 billion.
This decline was spread across most of its businesses. Gucci sales plunged to €1.34 billion from the previous €1.64 billion. Yves Saint Laurent’s sales dropped by 4% to €620 million. On the other hand, the company’s Bottega Veneta, Other Houses, and Kering Eyewear had some modest gains during the quarter, which helped to offset the decline in Gucci’s business.
Kering stock price also rose as its Chinese business continued to stabilize. Its Asia Pacific revenue dropped by just 2% in the third quarter, much better than what analysts were expecting.
Analysts are also banking on Demna Gvasalia, the new creative director who has been charged with reinvigorating the brand. However, his collection will come in Spring, calling for patience among investors.
To be clear, the strong Kering stock price performance is not unique as other companies have done well. LVMH stock price has jumped by over 42% from its lowest point this year.
Similarly, Christian Dior stock price has jumped to €570, up by 37% from its lowest level this year. Burberry share price has jumped by over 116% from the year-to-date low.
Kering stock price analysis
The weekly chart shows that the Kering stock price has done well in the past few months. It jumped from a low of €146 in April to a high of €335 this month.
Kering stock price has moved above the 50-week and 100-week Exponential Moving Averages (EMA), which is a bullish sign. It has moved above the 23.6% fibonacci retracement.
The Relative Strength Index and the MACD indicators have continued rising. Therefore, the stock will likely continue rising as bulls target the key resistance at €400. A drop below the support at €275 will invalidate the bullish outlook.
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