Daiwa has released a research report stating that it has raised the price target for Samsonite (01910) from HK$17.8 to HK$18.2, reiterating its "Buy" rating and maintaining a valuation basis of 12 times the average forecast earnings per share for 2026 to 2027.

The firm noted that Samsonite's third-quarter business trends were slightly better than expected at the time of its September update, and it anticipates that third-quarter sales at constant exchange rates will decline 0.5% year-on-year, outperforming the 2% year-on-year decline in the second quarter.

The firm expects the year-on-year sales decline in the North American market to narrow from 6% in the second quarter to 4%; Asia's performance is expected to outperform the 1% year-on-year growth seen in the second quarter, with the China market projected to sustain the 9% year-on-year growth momentum from the second quarter, the India market's decline to narrow, the Japan market likely performing similarly to the 3% year-on-year growth in the second quarter, and the South Korea market potentially growing at a slightly slower pace; Europe's performance is likely to be similar to the second quarter, while Latin America is expected to grow faster than in the second quarter.

Daiwa forecasts that Samsonite's third-quarter gross margin and adjusted EBITDA margin (excluding tariff refunds) will be 60.3% and 14.4% respectively, broadly in line with the second quarter.

The firm believes that the second quarter marked the trough of the business, and trends in the third quarter and month-to-date October are both better than the second quarter and previous expectations. It expects slight year-on-year growth in fourth-quarter organic sales, driven by channel restocking ahead of the holiday season, with trends in early October being encouraging.

Additionally, the company plans to offset raw material cost inflation through price increases, with implementation in the Asia market during the third quarter, in the Europe market during the fourth quarter, and potentially in the North American market in early 2027.

The firm expects that the consolidation of BEIS will bring approximately US$60 million in incremental sales in the fourth quarter.