UBS Upgrades SAMSONITE (01910.HK) to Buy as Revenue Shows Signs of Recovery

The analyst rating for Samsonite (01910.HK) is influenced by several positive factors highlighted in the article. Goldman Sachs noted that the company's management expressed a more optimistic outlook during the latest conference call compared to the previous one in August. This optimism is supported by the anticipated launch of new products and increased advertising efforts ahead of the peak season, which are expected to drive improved net sales growth in the fourth quarter compared to the third quarter. Additionally, based on Samsonite's third-quarter results, Morgan Stanley raised its adjusted net profit forecast for the company for the years 2025 to 2027 by 5-8% and increased the target price from HKD20.9 to HKD22, maintaining a Buy rating. Goldman Sachs also pointed out that the potential dual listing in the US next year and share buybacks to mitigate dilution effects could act as catalysts for further re-rating of the stock. These factors collectively contribute to a positive analyst rating for Samsonite.

The analyst rating for SAMSONITE was upgraded from Neutral to Buy by UBS due to several key reasons: 1. Revenue Recovery: SAMSONITE's revenue is regaining traction, with the impact of US tariffs being milder than expected. 2. Mitigation Strategies: The company has diversified strategies to mitigate the impacts of tariffs. 3. EBITDA Growth: UBS anticipates that SAMSONITE's adjusted EBITDA will grow by 8% year-over-year in 2026, driven by a 5% revenue growth and improved operating leverage. 4. Improved Operating Performance: Enhanced operating performance is expected to increase the visibility of a potential secondary listing in the US, which could lead to a re-rating of the price-to-earnings (PE) ratio. 5. Valuation Convergence: As the investor base expands, SAMSONITE's valuation is expected to align more closely with global peers over the medium to long term. As a result of these factors, UBS raised its target price for SAMSONITE from $17.4 to $24.1.

The analyst rating for SAMSONITE from Morgan Stanley is based on the positive sales trend observed from August to October, along with the significant increase in US air passenger traffic in October, which supports management's optimistic outlook for the fourth quarter of 2025. Despite the challenges posed by a high base in the wholesale business from the previous year, the overall positive indicators led to an Overweight rating and a target price of HKD24.