Hugo Boss Investment Recommendation BUY December 2012
Investment Thesis: Hugo Boss is a premium luxury brand with global appeal far exceeding current supply. Opportunities span under-penetrated Asian and the Americas expansion, growing owned retail operations, developing women’s apparel and accessories business and continued operational efficiencies. With its entry price points to luxury and a strong price/value equation, the Hugo Boss brand is positioned to benefit from the growing number of consumers entering the middle class in emerging markets drawn to premium products. Trading at an approximate 15% discount to global premium/luxury peers while providing a 3.6% yield, we view BOSS as an attractive holding. We establish a target price of €100 applying a peer forward P/E multiple of 19.3Xto our €5.20 2013 EPS estimate. Near term catalysts include the launch of ADRs in the US early in 2013 as Hugo Boss continues to focus on improving trading liquidity and Q4 results (early February).
See the whole thesis published here in Beauty & The Bull Magazine.