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20 Jan 2022
The cat''s out of the bag
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The cat''s out of the bag
PUMA SE (PUM:ETR) | 0 0 0.0%
- Published:
20 Jan 2022 -
Author:
Okines Warwick WO | Muir-Sands Charlie CMS -
Pages:
8
Quickly out of the blocks: Puma pre-releases Q4/FY results
Puma reported headline results for Q4/FY this morning. Full year EBIT of EUR557m came in 7% ahead of consensus and 10% ahead of our own forecasts. Sales momentum has been stronger than expected despite supply constraints. We bank the FY21 profits but leave FY22 forecasts unchanged. We see upside from here, and maintain our Outperform rating.
2021 personal best: Q4 beats on sales and profits
Q4 is typically a small quarter in terms of profitability, but stronger results drove a 7% consensus full year profit beat. Q4 constant currency sales growth of +14% was ahead of consensus (+9%) and driven by continued strength in Americas and EMEA. We estimate APAC to have declined c.3% YoY, with covid restrictions impacting China.
Eyes on the 2022 prize: forecasts unchanged
We have left our FY22 forecasts unchanged at EBIT (EUR645m). This is below consensus (EUR700m prior to today) and we see upside potential, but we think that management''s guidance (due in February) will be prudent and be in the ball-park of our forecasts. We model cFX sales +7.5% (40% higher than pre-covid), gross margins +75bps and EBIT margins +60bps to 8.8% because growth is likely to be weighted to the lower-margin Americas region. Key debates will be the short-term impact of covid and supply constraints (increasingly related to logistics absenteeism rather than production shortages) and the path of recovery in China. The cash on the balance sheet might begin to be a focus too.
Valuation: still an undervalued player
We continue to see attractive sales and margin potential. Puma trades on optically high near-term multiples (CY22 P/E c.35x) but we think valuation remains attractive given its growth potential. This is supported by our DCF valuation which assumes long term margins of 14%.