(Tiper Stock Exchange) – Equity reduced the recommendation to “Hold” up OVS extensiona clothing company listed on Euronext Milan, confirming the target price of the share at 2.6 euros per share. Analysts highlight that the results of the third quarter of 2022 were more than acceptable, considering the negative impact of the high temperatures in October, and messages about the start of the fourth quarter were encouraginggiven the recovery of revenue growth to around +10% in the first 45 days and the indication of financial leverage below 1x by the end of the year.
However, Equita thinks that at current prices the risk/reward is less attractive for a number of reasons. First, it consumption scenario in 2023 remains very challenging due to the recessionary context and the pressure on disposable income caused by inflationary pressures. OVS itself will have to support cost increasesparticularly in relation to personnel, cargo (due to the strengthening dollar), and energy and it will not be a given to pass new price increases.
Also, the comparison for the spring/summer 2023 season it will be very challenging. Finally, the stock comes off a significant rebound and it is the one that has performed best among peers since the beginning of the pandemic.
OVS extension register one decrease of 6.12% compared to the day before, settling at 2.088 euros. From an operational point of view, a downward extension of the curve is expected with a support area seen at 2.037 and subsequently at a level of 1.987. Resistance at 2.175.