GUCCI STOCK IS RATED A ‘BUY’ IN FIRST BOSTON’S 1ST REPORT
NEW YORK — Gucci Group NV stock rose 1 5/8 to 38 1/2 Wednesday on the New York Stock Exchange, as CS First Boston initiated coverage of the firm with a “buy” rating and a strongly bullish research report. CS First Boston was a U.S lead manager for Gucci’s initial public offering in October.
The recommendation comes on the heels of strong nine-month sales results that were released Tuesday by the firm. As reported, sales in the third quarter rose 85.3 percent and for the nine months gained 86.4 percent.
First Boston expects total sales to increase 90 percent in fiscal 1995 to $451.4 million from $238.1 million, and operating income to more than triple to $106.6 million from $31.5 million. For 1996, sales are expected to gain an additional 35 percent to $610.5 million and operating income to increase 33 percent to $142.2 million.
Analyst Stacy W. Pak said she estimates Gucci will earn $1.27 a share in 1995, $1.57 a share in 1996, and $1.90 in 1997. She indicated estimates were conservative, adding that order book for spring-summer is up over 100 percent.
The investment firm set a six-month price target for the stock of $45 and full-year target of $50. — Fairchild News Service