(CercleFinance.com) – Swatch Group has published its preliminary results for the 2023 financial year. Following this announcement, Stifel confirms its advice to Hold and leaves its price target unchanged at 225 Swiss francs.
The analyst indicates that Swiss watch exports fell by -0.7% year-on-year during the first two months of 2024, compared to +3.6% in the 2nd half of 2023 and +11.8% in the 1st half of 2023.
‘This base effect was visible in February, when exports to China fell 25% year-on-year.’
‘Our model currently reflects a significant -6% decline in FX sales for FY2024 (-8% in H1 24)’.
Stifel is cautious about Swatch Group shares due to a weaker than expected recovery for the Chinese consumer, difficulties on margins due to a stronger Swiss franc.
‘A significant improvement in Chinese consumer confidence and the outlook for Chinese consumer spending would likely make us more positive on the stock, which trades at 12.4 times P/E 2024E, according to our estimates,’ adds Stifel.
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