Shares in luxury shoemaker Tod's outshine Italian peer Salvatore Ferragamo on a Cheuvreux upgrade citing prospects of a faster international expansion for the maker of leather pebbled loafers.
"As the weight of Italy is set to decrease rapidly, we believe that investors may look at this strategic plan, which is promising," Cheuvreux analyst Thomas Mesmin says in a note about Tod's.
Cheuvreux upgrades Tod's to "outperform" from "underperform" with a target price of 92 euros, as it expects the group to reduce the weight of the weak Italian market to 37 percent of sales in 2013 from 50 percent last year.
Tod's shares have gained 37 percent this year so far but are trading below the mid-cap luxury sector average, it says.
The broker downgrades rival Salvatore Ferragamo to "underperform", citing a more cautious stance on margins expansion despite the strong sale performance driven by fast-growing markets such as Asia.
Shares in Tod's rise as much as 1.5 percent to 87.2 euros, outperforming a negative Milan's blue-chip index , while Ferragamo is down nearly 2 percent at 16.4 euros. Cheuvreux keeps Ferragamo target price at 16 euros.
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