Hold Rating for Watches of Switzerland Group PLC Amid Currency Fluctuations and Market Uncertainties

In a report released yesterday, Rogerio Fujimori from Stifel Nicolaus reiterated a Hold rating on Watches of Switzerland Group PLC (WOSG – Research Report), with a price target of p470.00.

Rogerio Fujimori has given his Hold rating due to a combination of factors impacting Watches of Switzerland Group PLC. The company faces challenges from recent unfavorable GBP/USD exchange rate fluctuations and conservative growth projections in the US market, leading to a reduction in FY26 adjusted EBIT forecasts by 4%. Additionally, the uncertainty surrounding US tariffs on Swiss-made watches, which could significantly impact pricing and margins, adds to the cautious outlook.
Despite these challenges, the stock remains attractive due to its strong association with Rolex, which constitutes a significant portion of its sales. However, the overall valuation appears cheap, yet lacks immediate catalysts for a re-rating, given the slowing US economic growth and the absence of tax-free sales for tourists in the UK. These factors collectively contribute to the Hold rating, as the stock’s potential upside is capped by macroeconomic headwinds and market uncertainties.

WOSG’s price has also changed moderately for the past six months – from p447.200 to p354.600, which is a -20.71% drop .