Richemont: Broad-Based Growth and Operating Leverage Support Overweight Rating and Upside Potential

Compagnie Financiere Richemont SA, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Edouard Aubin from Morgan Stanley maintained a Buy rating on the stock and has a CHF192.00 price target.

Edouard Aubin has given his Buy rating due to a combination of factors that underscore Richemont’s stronger-than-expected operating performance and resilient growth profile. The company delivered double-digit constant-currency sales growth at both Group level and in its core Jewellery Maisons division, clearly surpassing market expectations despite facing a tougher comparison period. Growth was broadly based across business lines, distribution channels and geographies, with most areas showing an improvement in underlying momentum versus the prior quarter. While headline numbers in Asia-Pacific/China may appear softer, Aubin highlights that this is primarily a function of a more demanding prior-year base, with the two‑year growth trend in that region actually improving.

Moreover, the Specialist Watchmakers division, often overlooked by investors, posted a notable upside surprise with solid positive growth, particularly outside China, supporting the case for diversification within Richemont’s portfolio. Although management continues to flag headwinds from foreign exchange and tariffs in the second half, Aubin expects only limited changes to full‑year EBIT expectations and even nudges his own forecast slightly higher, reflecting better operating leverage driven by stronger retail performance. The combination of robust top-line dynamics, broad-based momentum, improving efficiency and a price target of €192 implying further upside supports his continued Overweight stance on the stock. Overall, these elements lead Aubin to maintain a positive view on Richemont’s risk‑reward profile and justify his Buy recommendation.

In another report released today, Deutsche Bank also maintained a Buy rating on the stock with a CHF195.00 price target.

Based on the recent corporate insider activity of 19 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CFR in relation to earlier this year.