Jp Morgan cuts Puig's share value to 12.50 euros, hitting a new stock market low

Madrid – Shares for the Spanish fashion and beauty group Puig hit a new all-time low during trading on Thursday, October 9, plummeting by 6.70 percent. This sharp decline was triggered by a major shift in stance from US investment bank JP Morgan, which reportedly cut its valuation of Puig's share price by 50 percent.

The bank drastically lowered its estimated market price to 12.50 euros, down from its previous target price of 25 euros, which had been above the stock’s listing price of 24.50 euros on its debut in May 2024. Puig owns fashion houses such as Carolina Herrera, Rabanne, Nina Ricci, and Jean Paul Gaultier.

JP Morgan downgrades Puig's rating

This measure was also accompanied by a change in the investment bank's recommendation for Puig's shares. The bank downgraded its rating from 'overweight', which advised buying and holding shares in anticipation of future appreciation, to 'underweight'. The new recommendation advises reducing positions or selling the shares.

According to reports, JP Morgan analysts considered the potential impact of a slowdown in the fragrance market when changing their position on Puig's shares. This assessment echoes that of Bank of America (BofA) from late September. They view this scenario as highly plausible given the growth deceleration Puig has experienced this year. This slowdown is expected to ultimately affect the company's profitability and lead to a significant drop in profits.

JP Morgan has also reduced the target price for shares of the French beauty giant L'Oréal, similar to BofA's earlier move on Interparfums shares. The adjustment for L'Oréal is much smaller, a reduction of only 2.77 percent from 360 to 350 euros per share. The bank has maintained its “neutral” rating on the stock.

New all-time low, after a 6.70 percent drop

Following the investment bank's revised outlook on Puig's shares and future performance, the Spanish multinational's stock opened the trading session on Thursday, October 9, with an initial drop. The share price fell from the previous day's close of 14.32 euros to 13.98 euros.

From that point, Puig's shares continued their decline, plummeting to 13.27 euros per share, its lowest level since the IPO. The stock made a slight recovery during the day, ultimately closing at 13.36 euros. This closing price was also its lowest since the IPO. It represents a 6.70 percent decrease from the previous day's close of 14.32 euros and a 45.47 percent drop from the IPO price of 24.50 euros on May 3, 2024.

At the time of writing, the Spanish company's shares have recovered some of the previous day's losses during Friday's trading session on October 10. They are currently trading at 13.50 euros per share. This figure is 1.04 percent above the previous day's close of 13.36 euros, but remains 44.9 percent below the IPO price of 24.50 euros.