Kering shares are sinking about 13.9% on the Paris exchange to €185.96, pulling the whole luxury sector down with them. The slide follows the release of third-quarter 2026 results, which showed above all the damage done by Gucci, a brand that accounts for roughly half the group’s profit.

Gucci’s sales fell 6% in the third quarter to €1.29 billion (about $1.39 billion), weighing on revenue across the luxury group, which reported €3.3 billion (about $3.56 billion) in total, down 1% on an organic basis. Analysts are now asking what comes next for Kering stock.

A string of downgrades, from Barclays to Jefferies to JPMorgan

The notable feature of the session is the long roll call of downgrades hitting the luxury group, and in particular the work of Barclays’ research division, which — as it typically does on stocks it covers — laid out both a best-case and a worst-case scenario for the shares.

Among the downgrades landing in the hours after the release, Jefferies cut its target price on Kering from €220 to €200.

JPMorgan also revised its price objective down, from €215 to €200, as did Berenberg, from €164 to €158.

Barclays on the results: a significant drop for Gucci in the key DTC channel

Here is how Barclays’ research division framed Kering’s revenue, and Gucci’s in particular. At group level, «the numbers came in broadly in line with consensus, but there was a significant decline for Gucci in the key DTC channel [direct-to-consumer], which posted a 9% organic drop against a consensus estimate of around -6%».

The strategists noted that the other divisions turned in satisfactory results: the Fashion & Leather Goods brands recorded 2% organic growth in the DTC channel, while Kering Eyewear was up 4%.

That said, «following Gucci’s disappointing direct-to-consumer results in the third quarter and the deterioration in the broader consumer backdrop across luxury, we have revised our Kering estimates downward», the report from the UK banking group’s research arm continues.

So the pricing strategy Gucci launched has not paid off — at least not yet — at a moment that continues to look delicate for the entire luxury sector, as LVMH’s own results have already shown.

Kering stock: Barclays cuts its price target from €300 to €230

Barclays lowered its target price on Kering substantially.

The price objective was trimmed by 23%, from €300 to €230.

Even so, the new target implies a 23% gain for Kering shares from the current €185.96.

On the revenue outlook, the downgrade for the fourth quarter now implies 0.5% organic growth for Kering, against the 2.2% estimated previously, on the back of pessimism about Gucci’s fourth-quarter performance: «We have made significant cuts to our Gucci forecasts, and now estimate an organic contraction of 5%, against the 0.6% growth previously expected. Changes to the estimates for the other divisions are limited».

On operating profitability, the bank cut its «EBIT [earnings before interest and taxes] forecasts for the second half of 2026, above all for Gucci, since we no longer expect a progressive improvement in group-level EBIT margins».

As a result, «overall, we have revised our earnings-per-share (EPS) estimates down by 3% for 2026, 15% for 2027 and 13% for 2028».

The analysts also wrote that the target-price downgrade was based on their discounted cash flow (DCF) model, specifying that «the revision reflects both the estimate cuts and the introduction of an additional risk premium in the weighted average cost of capital (WACC), in light of the greater risk attached to Kering’s future cash flows».

What the Equal Weight rating is built on

The target price on Kering sits alongside an Equal Weight rating from Barclays, justified as follows:

«We expect the luxury sector to grow by around 3% in 2026, then settle into a growth rate of about 4%. We favor the stocks of companies able to grow faster than the market thanks to internal turnaround and operating-efficiency initiatives (self-help). Kering could be one of them, given a compound annual growth rate (CAGR) in revenue of 8%, EBIT margin expansion of roughly 10 percentage points and compound annual EPS growth of 55% through 2028. That potential, however, may only emerge fully once the phase of downward revisions to 2026 and 2027 earnings estimates is behind it».

In short, the analysts see significant medium-term turnaround potential at Kering, but believe the stock could still suffer from earnings cuts in the near term. For now, the Gucci revival under Kering chief executive Luca de Meo — the former Renault boss brought in to turn the group around — has yet to materialize.

Kering stock: Barclays’ bull case points to a jump to €310

Barclays also published both a best-case and a worst-case scenario for Kering shares.

The first, the upside case, assumes that Gucci’s sales per square meter rise 16% in 2027, 18% in 2028 and 25% in 2029, passing €50,000 (about $54,000) per square meter by 2030.

Such a «scenario would allow a further improvement in profitability, with Gucci’s EBIT margin reaching 27.3% by 2030, while still remaining below its historical highs».

The bull case implies a recovery in Kering shares to €310, which means that, against current levels, Barclays sees potential upside of 66.70% (+€124.04).

The bear case points to a slide to €110

The downside scenario, which implies a drop in Kering shares to €110, instead assumes Gucci like-for-like (LFL) sales growth limited to 3%, with revenue per square meter reaching roughly €28,000 (about $30,200) by 2030.

«In this scenario, cost savings would be unchanged against the base assumptions, with the exception of advertising and promotion (A&P) spending», the Barclays note adds.

The analysts add that, in the same setting, revenue would remain «broadly stagnant in terms of compound annual growth», against «an EBIT margin improvement of 400 basis points, or 4 percentage points, to 15.7% in 2029».

Were the worst case to materialize, Kering shares would fall 40.85% from current levels (-€75.96). The worst, unfortunately, may not yet be behind the stock.

Editor’s note

This article was originally published in Italian on money.it by Money.it Editorial on October 23, 2026 as «Azioni Kering affondano -14% dopo trimestrale per effetto Gucci. Gli scenari migliore e peggiore per il titolo». It has been translated and adapted for an international audience by the Money.it International desk.