Oddo BHF reiterates its ‘underperformance’ opinion on Swatch Group with a price target reduced from 167 to 146 Swiss francs, judging that ‘the expected recovery could be slow to materialize’ and that ‘caution remains in order’.
‘The persistence of very unfavorable trends in Greater China (a third of the group’s turnover in 2023) leads us to radically revise our forecasts (nearly -25% on average on EBIT 2024-2026’, explains the analyst.
Swatch’s position remains, according to Oddo BHF, more unfavorable than that of most of the other stocks in the sector under coverage at this stage (fragmented presence in luxury watchmaking, strong exposure to China and aspirational consumption).
Concerning the possibility mentioned in the Swiss press of a possible delisting of the group, he remains cautious about its feasibility in view of the capital that the Hayek family would have to commit to the operation in the absence of external financial partners.
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