A new investment bank joins Puig. Citi initiates coverage on the company and does so by valuing it below the IPO price: sees its shares at 23 euros per share, compared to the 24.50 with which the firm debuted on the Spanish market on May 3.
The American firm advises, however, buy the shares of the Catalan company. With its target price, Citi gives Puig an upside potential of 16% over the next 12 months.
From Citi they explain that “lFragrances are a more volatile category than other beauty segments. However, if we compare this fragrance cycle with the makeup boom in the US between 2013 and 16 (both due to the low barriers to entry and the greater supply outside the home), along with the more structural changes in the consumption patterns, we maintain that the current fragrance cycle could have at least 2 more years to grow.” Based on these growth-elevating catalysts, They estimate that the category will grow 6% annualized during 2025 and 2026.
In addition, they also see a possible additional growth of 300 basis points thanks to the improvement of the fragrance portfolio (250 basis points) and the expansion of Charlotte Tilbury (which they value at least 50 basis points). “This growth strategy stands out in a sector where most of its counterparts are struggling to revive growth (due to the weakness of China, the impact of prices and the slowdown of dermopharmacy in the US) and gives time to Puig to strengthen its makeup and skin care businesses,” they explain.
However, and based on these forecasts, They estimate that Puig is bought at a PER (times the profit is reflected in the share price) 20 times in 2025which represents, according to Citi, a 12% discount compared to its peers. They assess this reduction as “reasonable given Puig’s shorter history as a listed company.”
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