(Finance) – Equity has increased a 3.3 euros per share (from 3.1 euros) the target price on OVSa clothing company listed on Euronext Milan, on a negative day for the entire market, confirming the recommendation “Buy” on the stock, after management’s call with the financial community.
Among the main ideas: the current trading it is indicated around +5%; for what concern gross margin, the second quarter is expected to improve, thanks to the confirmation of lower purchasing costs and the disappearance of the sales theme of the previous season; the company is satisfied with the current level and the current quality of the warehouse, better than last year (around 10 million euros of increased inventory depends on the Suez problems due to longer transit times); The capex FY24 is down 5 million euros YoY, given the
completion of strategic projects such as the revamping of the main stores, the logistics update and the new checkouts.
Equity confirms P&L 2024-25 estimates and improves 2025 FCF by 5% to €83 million, reducing 2025 CAPEX to €80 million from €86 million.
“The stock suffered some profit taking yesterday after the good performance (YTD +20%), but we think it has re-rating space given the positive comments on the momentum of sales and margins in 2Q and the message on the normalization of capex and given the multiples that remain compressed”, reads the research.