Royal Bank of Canada announced on Monday that it had lowered its price target for Puma from €70 to €64, while renewing its 'outperform' rating on the stock.

In a research note, the Canadian broker explains that the sports equipment sector tends to raise some concerns for 2024 following the disappointing results recently unveiled by Nike and JD Sports.

In addition to the worrying performance of Nike and JD Sports, RBC points out that investors are also concerned about the lack of visibility surrounding the launch of the Fenty x Puma line, the current hype surrounding the brand, the intensification of competition among wholesalers, the health of the North American market, the achievement of targets for 2024 and 2025, and the tone of the upcoming investor day.

However, in view of the 21% fall in the share price over the past month, the broker considers that these factors are well integrated into the share price, which leads it to maintain its 'outperform' rating, in view of the Group's still vigorous earnings growth (+30%) and undemanding stock market valuation (PER of 17x).

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