Puma ?accumulate?

11.07.06 - AC Research

LONDON, July 11 (newratings.com) ? Analyst Henning Wagener of AC Research reiterates his "accumulate" rating on Puma AG (PUM).

According to AC Research?s research note dated July 10 and published this morning, the company has indicated that it is extremely satisfied with business during the FIFA World Cup, which has now come to an end. Puma was able to exceed its own World Cup goals, the analyst mentions. The company did not only manifest its position as one of the worldwide leaders in football, but also made some major impact with innovative football products, the analyst says. Puma expects its football business to be up about 40% y/y in 1H, the analyst adds.

AC Research considers the company?s statements as highly positive. The impact of the FIFA World Cup as in-line with expectations, the analyst says.

Rising expectations of a DAX listing may also boost Puma?s share price over the next few months, according to the analyst. Towards the end of June, the company reached the thirtieth position in terms of market capitalization and the thirty-second position with respect to liquidity, the analyst reports. Puma has therefore fulfilled the two criteria for an acceptance into the German DAX selection index, AC Research points out. The analyst mentions, however, that Merck and Salzgitter are two additional candidates for a DAX listing.

In the near term, the listing could become very important, when Bayer holds more than 95% of Schering?s shares, the analyst says. At that time, a quick replacement within DAY would be imminent, the analyst adds.

At the current share price of ?300 and a 2006 P/E ratio of about 19, the company?s stock enjoys a rather moderate rating, AC Research mentions. Currently, Puma finds itself on an intensive course of expansion, the analyst says. In securing additional business segments, the company?s future growth would be placed on a broader basis, the analyst adds. Against the background of continuing bright growth prospects, experts believe Puma?s risk/reward profile is attractive, according to the analyst.

AC Research reiterates its "accumulate" rating on Puma.