EQUITY RESEARCH: HUGO BOSS AG

This document presents a comprehensive evaluation of Hugo Boss as part of the ISEG Master in Finance Final Work Project. Hugo Boss, a widely acknowledged and influential fashion enterprise, has firmly positioned itself as a key player in the realm of luxury fashion. It has gathered praise for its top-tier clothing, accessories, and fragrances, making it a good choice for a diverse customer base in search of sophisticated and stylish fashion options. The choice of this company as the subject for this master thesis final project was motivated by the author's interest in Luxury Fashion. Besides, the introduction of the Boss and Hugo brand segments signifies the company's strategic efforts to expand its market reach. Investigating this expansion provides a significantly interesting analysis opportunity and relevant aspect of the research. The report recommendation for Hugo Boss is to BUY, with a projected price target of €78.95, determined through the Discounted Cash Flow (DCF) model, using the Free Cash Flow to Firm (FCFF). This represents an approximate 17.0% upside potential from the price €67.46 of December 29, 2023, with a medium risk assessment. To support this valuation, additional methods were applied, including the DCF using the Free Cash Flow to Equity (FCFE) which yielded a price target of €71.54, reflecting a 6.0% upside. Relative Valuation through Peers’ multiples resulted in a price target of €75.72, indicating a 12.2% upside.