With Demna‘s first runway show for Gucci only a few weeks away, sentiment seems to be brightening around prospects for Kering‘s linchpin luxury property, which accounts for 39 percent of group sales.

TD Cowen bumped up its forecasts for the Italian brand – it expects 2 percent growth in the first half of 2026, and 6 percent in the second half – “as newness builds throughout the year,” Oliver Chen wrote in a research note Wednesday.

“We believe Gucci is back on the radar,” he said. “Our take is that Gucci’s sequential improvement and flat North America are encouraging.”

On Tuesday, Kering reported fourth-quarter revenues fell 9 percent at reported exchange rates to 3.91 billion euros, representing a decline of 3 percent in comparable terms, beating consensus estimates.

Gucci also showed a sequential improvement, with organic revenue declining 10 percent, slightly better than the 11 percent decrease forecast by analysts, as reported.

TD Cowen is banking on a “rapid rollout cadence” for new Gucci products by Demna, and “broader collections building” through the bottom half of the year.

“We like (Kering’s) agility on brand and product innovation, which consistently instills the company’s fashion heritage among each luxury house,” Chen wrote, while cautioning that traffic in Gucci stores “remains weak and newness is still early. Management overhaul and creative reset are positive, but execution risk is high given scale.”

TD Cowen maintains a hold rating on the Kering stock, which was down 2.5 percent in midmorning trading on Wednesday after closing up 11 percent on Tuesday.

Barclays, meanwhile, is bullish on Gucci’s prospects for a mega fragrance franchise with its new beauty licensee L’Oréal, which should get its hands on the brand by 2028 at the latest.

Given L’Oréal’s track record in multiplying the revenues of Yves Saint Laurent and CeraVe tenfold since taking them over, Barclays estimates that a Gucci fragrance business of 5 billion euros “is not outside the realm of the possible.”

The bank estimates Gucci fragrance sales currently hover around 500 million euros under current licensee Coty.

“L’Oréal has consistently demonstrated its ability to integrate acquisitions successfully and scale brands into global powerhouses, having completed more than 70 acquisitions over the past 20 years,” said the report, which listed analyst Warren Ackerman as the lead author.

Barclays estimates that after only four years of ownership, L’Oréal has already multiplied Prada Fragrances by five times to more than 500 million in revenues at the end of 2024.

“L’Oréal’s ability to scale and nurture brands for the long term is firmly established,” Ackerman wrote. “That said, if we look at what is happening with Prada, L’Oréal is scaling it much faster than YSL at the beginning, perhaps because it has learned what works and is able to accelerate growth over a shorter time frame, avoid pitfalls and minimize risks.

“This doesn’t mean Gucci will be a sure thing but it gives us a high degree of confidence that L’Oréal can deliver a step change in Gucci’s performance when it gets the ‘keys’ to the brand,” he added.

L’Oréal is scheduled to report its fourth-quarter revenues on Thursday after the close of trading on the Paris Bourse.

Bernstein maintains an underperform rating on the stock and analyst Luca Solca adopted a wait-and-see posture in a new report Wednesday, characterizing Demna’s fall 2026 runway as a “first acid test.

“We would consider a positive reaction to the show by industry buyers and influencers as a catalyst for a more positive stance on the stock,” he wrote. “Management has indicated that they intend to quickly translate runway hype into in-store conversations and sales density.”

Bernstein lowered Gucci’s 2026 organic growth forecast to 4.4 percent from 5 percent, anticipating declines in wholesale growth.