MILAN – Citigroup became the latest bank to downgrade Bulgari SpA’s stock to “sell” over concerns the jeweler faced limited growth prospects in the immediate future.

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Citigroup analysts Thomas Chauvet and Richard Edwards cut their target price for Bulgari to 6.40 euros, or $9.14 at current exchange, from 7.80 euros, or $11.14, citing unfavorable geographic exposure and underperforming watch and accessories sales.

“One-third of Bulgari’s revenues are generated in Italy and Japan, versus about 15 to 18 percent for the broader luxury sector,” the analysts wrote in a research note. “These markets have limited growth prospects in 2008-’09 and significant downside risks to GDP and private consumption.

“Watches and accessories [which account for around 35 percent of group revenues and earnings] once again underperformed group and luxury industry trends. We believe the repositioning exercised in these product categories will take some time to deliver tangible results,” they added. Last month, a number of other banks and securities firms cut ratings or share price estimates on Bulgari’s stock after the jeweler narrowed its full-year guidance following an 8.8 percent drop in second-quarter profits.


Bulgari shares fell 1.7 percent to 7.21 euros, or $10.29, at the close of trading in Milan on Tuesday.