Key Takeaways:
- Price Target: Kering valuation points to a target price of €415 by 2027, reflecting normalized earnings and improved operating leverage as margins recover from recent lows.
- Upside Potential: From the current price of €311, Kering offers a projected total return of 33% over the next 2 years based on earnings recovery rather than valuation expansion.
- Return Profile: This setup translates into an estimated 16% annualized return for Kering, supported by profit normalization and stable brand demand.
- Margin Reset: Kering operating margins are modeled at 15% by 2027 which is well below prior peaks but consistent with disciplined cost control during a revenue reset phase.
Kering SA (KER) is a global luxury group controlling brands such as Gucci, Saint Laurent, and Bottega Veneta which generated about €17 billion in revenue in 2024 across Europe, Asia, and the Americas.
Kering has remained in focus after sector volatility tied to the Saks Global bankruptcy and renewed attention on China demand following Richemont’s recent sales beat, which affects luxury sentiment into 2026.
In 2024, Kering revenue declined by 12% year over year to €17 billion as Gucci weakness weighed on group performance which signifies the importance of brand execution in the current cycle.
Operating profit fell to roughly €3 billion in 2024, with operating margins compressing to about 15%, reflecting cost rigidity and lower volume absorption during a transitional earnings year.
Even with Kering valued at roughly €80 billion in market capitalization and earnings expected to stabilize through brand repositioning and margin recovery, the stock price still reflects caution, leaving open how much improvement the market is willing to price in next.
What the Model Says for KER Stock
We evaluated Kering SA using operating assumptions that reflect a brand-led recovery cycle, margin reset discipline, and stabilized positioning within the global luxury sector.
Based on revenue growth of -1.7%, operating margins of 15.2%, and an exit P/E multiple of 39.5x, the model projects Kering SA reaching €415.12 per share.
That outcome represents a 33.4% total return, equal to a 15.8% annualized return for Kering over the next two years.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for KER stock:
1. Revenue Growth: -1.7%
Kering SA delivered uneven revenue trends recently as Gucci weakness offset strength at Saint Laurent and jewelry, placing Kering SA in a short-term consolidation phase after prior expansion.
Current execution at Kering SA reflects brand reset actions at Gucci, softer wholesale demand, and gradual improvement signals from Asia, which temper near-term growth visibility despite portfolio depth.
Looking forward, Kering SA faces risks from slower luxury spending and brand transition timing, balanced by normalization in China and incremental recovery across leather goods categories.
Consensus expectations assume -1.7% revenue growth for Kering to capture short-term brand transition pressure alongside early stabilization across core maisons.
2. Operating Margins: 15.2%
Kering historically generated operating margins above 25% during peak brand cycles, highlighting strong operating leverage when Gucci momentum and scale efficiencies aligned.
Recent margin compression reflects higher brand investment, lower volumes, and cost absorption challenges, pushing Kering margins well below historical highs during the current reset phase.
Margin recovery for Kering depends on disciplined cost control, selective pricing actions, and improved brand execution rather than aggressive expansion or structural cost changes.
Analyst projections place Kering’s operating margins at 15.2%, reflecting partial normalization without assuming a full return to past profitability levels.
3. Exit P/E Multiple: 39.5x
Kering currently trades at elevated earnings multiples relative to near-term fundamentals, reflecting investor expectations for eventual brand recovery rather than current earnings power.
Historically, Kering SA commanded premium valuations during periods of strong Gucci-led growth, while multiples compressed sharply during execution missteps and earnings volatility.
Sustaining a higher exit multiple requires visible revenue stabilization, margin rebuilding, and restored confidence in Kering SA’s flagship brand positioning.
Street consensus points to a 39.5x exit multiple that prices in Kerings recovery progress while still sitting below prior cycle peak valuations.
What Happens If Things Go Better or Worse?
Kering SA’s outcomes depend on brand momentum at Gucci, execution across the portfolio of maisons, and cost discipline, setting up a range of possible paths through 2029.
- Low Case: If demand remains uneven and brand repositioning progresses slowly, revenue grows around 3.0%, margins stay near 9.5%, and valuation stays restrained, returns rely mainly on gradual earnings repair → 9.6% annualized return.
- Mid Case: With core brands stabilizing and operational execution holding, revenue growth near 3.3%, margins improving toward 10.0%, and valuation normalizing, steady earnings expansion supports balanced upside → 14.4% annualized return.
- High Case: If Gucci regains traction faster and portfolio brands outperform, revenue reaches about 3.6%, margins approach 10.2%, and valuation pressure eases, share price momentum strengthens → 18.2% annualized return.
What matters most for Kering SA is progress at Gucci and cost control across the group, as brand execution will largely determine whether earnings stabilize and begin to recover.
How Much Upside Does It Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
