Moncler's Growth Should Continue, Driven by Core Brand and Stone Island; FVE Raised to EUR 37.5

We are increasing our fair value estimate for narrow-moat Moncler from EUR 27 per share to EUR 37.50 per share to account for our higher revenue growth expectations for the group of 7.7%, with 6.5% growth for the Moncler brand over the next 10 years and 14.5% for Stone Island. This compares with our 5.5% growth expectations for the luxury industry and factors in lower maturity of these brands versus bigger competition (Moncler is still adding stores at mid-single-digit pace with notable white spaces in the U.S., while Stone Island has long runway for increasing retail penetration of the business). We also increase our operating margin assumptions to low-30% versus 28.3% in 2021 and high-20s in our prior model. We believe that operating leverage inherent to the business would be dampened by investments in store expansion and marketing to promote both brands (but especially Stone Island).