While confirming its 'hold' recommendation on Swatch Group, Stifel has lowered its price target from 250 to 230 Swiss francs, in the wake of a reduction in its sales and EPS estimates due to the appreciation of the Swiss franc.
The broker's new EPS estimates for 2024-25 are around 9% below consensus, but at 12.5 times its expected EPS for 2024, the Swiss watchmaker's shares look cheap.
According to Stifel, the stock 'lacks catalysts for a re-rating due to the combination of slowing or normalizing growth, negative earnings momentum and a weak consumer environment in China'.
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The Swatch Group SA is a Switzerland-based holding company engaged in the apparel and accessories industry. The Companyâs activities are divided into two core business segments: Watches and Jewelry, as well as Electronic Systems. The Watches and Jewelry segment includes the production and sale of branded watches, jewelry and quartz movements, notably the brands Breguet, Harry Winston, Blancpain, Glashuette Original, Jaquet Droz, Leon Hatot, Omega, Longines, Rado, Union Glashuette, Tissot, Balmain, Certina, Hamilton, Calvin Klein watches and jewelry, Swatch and Flik Flak. The Electronic Systems segment includes the production and marketing of electronic components, notably batteries and sports timing equipment. The Company also supplies products from these segments to third-party watchmakers. Swatch Group SA is represented worldwide through its subsidiaries and distributors, notably Tourbillion and Hour Passion, and operates Swiss production plants in Boncourt, Grenchen and Villeret.
SWATCH GROUP 
