In its market update, KMD Brands indicated sales growth was moderating, to 15.6% in the third quarter from 35% in the first half. Yet, Morgan Stanley considers this is still healthy and tracking ahead of expectations.

Gross margins are also withstanding the pressure, which suggests the business is not aggressively promoting products to drive sales.

Still, Morgan Stanley expects the market will remain cautious because of the challenging macro environment. Equal-weight retained. Target is $1.05. Industry view is In-Line.

Sector: Retailing.

Target price is $1.05.Current Price is $1.06. Difference: ($0.01) - (brackets indicate current price is over target). If KMD meets the Morgan Stanley target it will return approximately -1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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