Stifel Nicolaus analyst Rogerio Fujimori has maintained their neutral stance on SWGAF stock, giving a Hold rating on February 5.
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Rogerio Fujimori’s rating is based on several critical considerations affecting The Swatch Group’s current and projected performance. Despite a potential margin recovery from a low level in 2024 to a forecasted 10% by 2027, the company lacks immediate catalysts that could prompt a significant re-evaluation of its stock. The diverse performance of its brands, particularly with strengths in Omega, Longines, and Tissot in the U.S., contrasts with the underperformance of Breguet and Blancpain.
Moreover, the company’s dependency on Greater China, which now contributes 27% of total sales, signifies a notable risk given its recent sales decline. The stock currently trades at a price-to-earnings ratio that aligns with its historical average, offering limited forecasting upside. Consequently, the overall mixed brand momentum, combined with modest top-line growth and margin potential, supports the Hold rating, as it reflects a balanced risk-reward profile without compelling catalysts for a re-rating.
In another report released on February 5, Citi also maintained a Hold rating on the stock with a CHF163.00 price target.