Salvatore Ferragamo SpA, the Italian luxury company known for pumps with bows, may seek a higher valuation multiple than its bigger rival Prada SpA, according to research by a bank helping manage the initial public offerings.
Ferragamo may be valued at as much as 2.25 billion euros ($3.2 billion), or 26 times estimated 2012 profit, a note by analysts at Banca IMI SpA shows. The analysts estimate that Prada, which also plans to sell shares in an IPO next month, may be worth 21 times 2012 profit, or 10.7 billion euros.
Luxury goods makers Ferragamo, which plans to list its shares in Milan, and Prada, whose stock will be traded in Hong Kong, are planning IPOs as demand for bags and shoes in Asia fuels growth and draws investors. Ferragamo gets more than 50 percent of sales in Asia.
Ferragamo ranks “in the medium-high to high end of the fashion market,” the IMI analysts said in the note. The brand’s iconic shoes and “full ‘Made in Italy’ craftsmanship” are among its key drivers, the analysts said.
Banca IMI estimates Ferragamo may post net income of 72.6 million euros this year and 86.9 million in 2012, according to the note. Prada’s net income may rise to as much as 503 million euros in 2012 from 381 million euros this year, IMI analysts said earlier this month.
Officials for Ferragamo didn’t have an immediate comment.
Ferragamo’s valuation would exceed that of a peer group including LVMH Moet Hennessy Louis Vuitton SA and Tiffany & Co., which trade at an average of about 21 times 2012 earnings, as calculated by IMI based on May 13 prices.
Banks started canvassing interest in Ferragamo yesterday and the listing is expected by the end of June, according to terms obtained by Bloomberg News. About 25 percent of the company will be freely traded after the IPO, the terms show.
Prada and Ferragamo will be seeking to lure buyers while The Carlyle Group’s Moncler SpA, a luxury sportswear maker, also attempts to hold an IPO in Milan. Moncler may be valued at as much as 1.28 billion euros, Banca IMI analysts wrote in a separate note to clients. Moncler may post net income of 72.2 million euros in 2012, IMI analysts estimate.