The analyst estimates that the group’s turnover for the first quarter of its financial year ending March 2025 should be marked by the persistent weakness of sales in Asia.
‘ We should not count on an improvement given the recent indications concerning China given by companies in the sector and also a difficult basis of comparison (growth y/y cc of 40% last year after 25% in the quarter previous) ‘ indicates Oddo BHF.
The analysis office lowered its forecast for the region from -8% to -14% for the 1st quarter and although it raised its estimates for Japan and the Middle East, the total growth in group turnover at cc for this quarter is now expected at +0.7% compared to 2.9% previously.
‘ By division, we have moderately lowered our growth forecast for Maisons Joaillères from +4% to +2.5% but it is mainly for Specialized Watchmakers that the weakness in Asia should be most visible, hence the estimated growth for Q1 at -5% now (we had -1%)’ estimates Oddo BHF.
According to the analyst, Maisons Joaillères, which represents the majority of the group’s profits, should be able to compensate for the weakness in Asia with a more satisfactory trend in other zones, notably Europe and the United States.
‘ For the financial year ending March 2025, we expect annual growth at cc of +5% compared to 5.8% previously (Maisons Joaillères at +6.2%, Specialized Watchmakers at +1.2%) and a group EBIT margin at 23.7% (compared to 23.8%). For March 2026, group growth is slightly reduced to 6.5% compared to 6.8% (Maisons Joailleres at +7.5% compared to 8%, Specialized Watchmakers at +3.5%) but the EBIT margin is expected unchanged at 24.6%. Ultimately, the revision made to the annual group EBIT remains contained at -1% over the next three financial years,” adds Oddo BHF.
The analyst believes that the stock does not seem expensive given the position held in jewelry. He confirms his favorable buying opinion with a target of 158 CHF.
‘ Its multiple discount compared to the LVMH benchmark has been reduced to -12%, without disappearing completely and its multiples remain at relatively modest levels in absolute terms (PE on March 25th close to 21x, PE on March 26th close to 19x)’.
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