Inter Parfums To Dominate Luxury Fragrance Market With New Licenses After Sales Crossed $1B, Says Analyst

DA Davidson analyst Linda Bolton Weiser reiterated a Buy rating on the shares of Inter Parfums Inc IPAR and raised the price target from $158 to $176.
The analyst said IPAR's global prestige fragrance market share was only 3% in 2020.
With the recent additions of the Ferragamo, DKNY, and Lacoste licenses, the analyst estimates IPAR's market share to be 4%-5%.
The analyst noted IPAR's strategy to grow existing product lines organically, with base business growth at a rate exceeding the prestige fragrance market.
The company has demonstrated the strategy with several brands, including Montblanc and Jimmy Choo, which have grown consistently over many years.
In the last 10 years, the analyst noted, IPAR's sales growth, excluding FX and sales contribution, was at least 10% in every year but two, compared to a low-single-digit growth of the prestige fragrance market.
With IPAR's sales surpassing $1 billion in 2022, the analyst thinks the company has finally garnered a reputation in the industry to be a contender for bigger licenses, as evidenced by its Lacoste win.
The analyst thinks that IPAR's new Italian subsidiary puts it in a strong position to partner with Italian luxury brands.
The analyst also believes the company has opportunities to selectively work with brand owners to develop fragrance lines from scratch.
The analyst is more optimistic on IPAR because component shortages could ease soon, as they already have for Coty Inc COTY, and Lacoste alone could add sales of $150 million or 12.5% in 2024, which is not reflected in Street estimates.
Price Action: IPAR shares are trading higher by 3.30% at $144.84 on the last check Wednesday.

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