(CercleFinance.com) – Bank of America issued a buy recommendation on Richemont on Monday, with a target price of 170 Swiss francs, showing an upside potential of around 50%.
In a research note, BofA evokes a “very different” group, which leads it to revise upwards its forecasts of results for the next years.
According to the intermediary, the market estimates struggle to take into account the evolution of the watch and jewelery markets, as well as the ‘significant’ changes at Richemont.
Unlike the financial crisis of 2008/2009, which had strongly penalized the most rocky populations, the current inflationary crisis penalizes mainly consumers with the lowest incomes, points out BofA.
In addition, jewelry now accounts for 80% of the operating profit (Ebit) of the luxury group, while the sector is precisely benefiting from a once again favorable dynamic.
As for the wholesale sales of watches, which had been able to penalize the activity in the past, they now represent a smaller share of the activity, with a positioning more focused on the high end, adds the analyst?
BofA is accordingly raising its profit forecasts for the 2023 and 2024 financial years, which are now 5% to 10ù above those of the consensus.
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