Kering's (PPRUF) makeover of its key Gucci brand will deliver "sector-leading" growth of more than 10% next year, Goldman Sachs noted as it upgraded the luxury goods maker to buy from hold.

"The most significant recent repositioning has been Gucci's move, under creative director Alessandro Michele, from a marketing-driven to a more creative direction," noted analysts Richard Edwards, Jamie Bajwa and Natasha de la Grense. "This has begun to deliver solid sales acceleration (2Q comp sales +7% yoy,) which we argue should continue as this approach is rolled out across the range."

Goldman raised its 12-month price target to €213 ($239.58), up from €134.20 based on a 16.5 times equity valuation to Ebit multiple. Kering traded Tuesday at €181.8, up €1.90, or just over 1%.

Kering, whose 16-brand luxury wardrobe also features Yves Saint Laurent, Bottega Veneta, Stella McCartney and Alexander McQueen, will likely grow at the expense of rivals as spending on luxury goods slows, with Goldman forecasting sector revenue to rise no more than 1% over the next three years.

Chinese spending is central to that outlook, with analysts predicting that a more mature market will lead to slower spending growth and that middle-class discretionary spending will shrink as the cancelling of the 'single child' policy gives rise to larger families.

Brands perceived as fashion focused, rather than so-called heritage (or traditional) brands are best positioned to continue to grow in the slowing market, according to Goldman analysts. They tipped Kering, LVMH (LVMUY) , Italian clothes maker Moncler (MONRF) and Salvatore Ferragamo (SFRGY) as the likely winners, while Hugo Boss (BOSSY) , Prada (PRDSY) , and Tod's (TDPAY) were projected to lose market share.

Goldman's upgrade came a day after Exane BNP Paribas analysts downgraded Kering from buy to hold, even though they increased the target share price from to €210 from €184.

"Kering should continue to benefit from Gucci's accelerating momentum," Exane noted on Monday. "But Bottega Veneta is under pressure, the departure of (creative director Hedi) Slimane poses questions on Saint Laurent for 2017, and Puma's divestiture could take longer than expected to materialize."

Kering has been regularly rumored to be pondering a sale of its controlling stake in sportswear maker Puma, though chairman and CEO François-Henri Pinault said in June he would not consider a sale before 2018.

Exane BNP's top tip in the luxury sector is LVMH, which it rates outperform with a price target of €183, up from €180. LVMH shares traded Tuesday at €151.40.

"LVMH is strong in accessible product categories - champagne, fragrances and cosmetics - where barriers to entry are high: making it one of the best positioned companies to tap into global middle class development," noted Exane BNP.