Richemont: Specialist Watchmakers Recovery Adds Another Leg To The Equity Story

Mare Evidence Lab 6.19K Followers Follow Summary Richemont shares have fallen nearly 15% over the past two months, underperforming the luxury index despite resilient fundamentals and continued strength among jewelry maisons. Swiss watch indicators are improving, supporting our expectation of a recovery in Specialist Watchmakers and better operating leverage following Q1’s 8% sales growth. We expect double-digit Q2 growth at the Group level, led by Jewelry Maisons, while improved profitability at Watchmakers should partly offset pressure from higher gold prices. Valuation remains attractive relative to luxury peers, while strong net cash, FCF generation, and higher ordinary earnings provide additional support for the equity story. Robert Way/iStock Editorial via Getty Images We are back to comment on Compagnie Financière Richemont SA ( CFRHF ) ( CFRUY ), which has lost almost 15% of its stock price in the last two months (Fig. 1). Here at the Lab, we were the This article was written by Mare Evidence Lab 6.19K Followers Follow Buy-side hedge professionals conducting fundamental, income oriented, long term analysis across sectors globally in developed markets. Please shoot us a message or leave a comment to discuss ideas.DISCLOSURE: All of our articles are a matter of opinion, informed as they might be, and must be treated as such. We take no responsibility for your investments but wish you best of luck. Analyst’s Disclosure: I/we have a beneficial long position in the shares of CFRHF, CFRUY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.