Puma Earnings: On Track to Meet Guidance Despite Weak Euro and Shaky Economy; Shares Fairly Valued

After recent weakness on concerns of unsettled economic conditions in the U.S. and China, Puma’s shares leapt about 8% after its currency-neutral sales increased 6% in 2023’s third quarter. Moreover, it reiterated its full-year guidance for high-single-digit constant-currency sales growth and operating income of EUR 590 million-EUR 670 million. As our forecast is within this range, we do not expect to make any material change to our EUR 49 per share fair value estimate, leaving shares as fully valued. Although we rate Puma as a no-moat firm, we believe it has strengths, including the popularity of its footwear (sales up 11% currency-adjusted in the quarter) and collaborations with popular labels like Rihanna’s Fenty.