The Swatch Group (UHR) AI Stock Analysis

• Market Cap: $8.28B
• Dividend Yield: 2.84%
• Average Volume (3M): 175.09K
• Price to Earnings (P/E): 132.6
• Beta (1Y): 0.93
• Revenue Growth: -13.19%
• EPS Growth: -88.43%
• Country: CH
• Employees: 32,477
• Sector: Consumer Cyclical
• Sector Strength: 71
• Industry: Luxury Goods
• EPS (TTM): 0.06
• Shares Outstanding: 28,936,000
• 10 Day Avg. Volume: 192,113
• 30 Day Avg. Volume: 175,095
• PEG Ratio: -0.67
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -35.59
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $123.30
• Price Target Upside: -22.14% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 10

• Rating: 55 Neutral
• Price Target: CHF162.00 ▲(2.31%Upside)

The Swatch Group's stock score is primarily impacted by its strong equity position and low leverage, although this is offset by declining profitability and cash flow issues. Technical indicators suggest the stock is overbought, and the high P/E ratio raises valuation concerns.

Positive Factors

Margin Recovery

Swatch Group offers a potential margin recovery from a depressed level of 4.5% in 2024 to 10% by 2027.

Sales Growth

Sales momentum in the US improved significantly, with +29% growth post-election in December.

Negative Factors

Financial Stability

There is a significant cash outflow in 2024, impacting the financial stability of Swatch Group.

Sales Estimates

Sales estimates for Swatch Group have been reduced for FY25-26 due to a lower FY24 base.

Structural Challenges

The Swatch Group is facing numerous structural headwinds, including a shrinking market and market share losses.

The Swatch Group Business Overview & Revenue Model

Company Description

The Swatch Group (UHR) is a multinational corporation based in Switzerland, renowned for its comprehensive portfolio of watch brands and its extensive expertise in microelectronics and watchmaking. The company operates in various sectors, including the design, manufacture, and sale of finished watches, jewelry, and watch movements and components. Its diverse brand portfolio ranges from lower-end to luxury watches, with notable brands such as Omega, Longines, and the namesake Swatch. The Swatch Group also has a foothold in the production of electronic systems used in watchmaking and other industries.

How the Company Makes Money

The Swatch Group generates revenue primarily through the sale of its wide array of watches and jewelry. This includes its high-end luxury brands such as Breguet and Blancpain, mid-range brands like Tissot and Hamilton, and its entry-level watches under the Swatch brand. The company also earns from manufacturing and supplying watch movements and components to other watchmakers. Additionally, their microelectronics segment contributes to earnings by producing integrated circuits and other electronic components used in timekeeping and other applications. Partnerships with various retailers and distributors globally help in extending their market reach, further enhancing sales and revenue streams.

The Swatch Group Financial Statement Overview

Summary

The Swatch Group exhibits a strong balance sheet with low leverage and robust equity. However, challenges in revenue and profitability, coupled with declining cash flows, pose significant risks to financial health. Effective cost management and revenue enhancement are critical.

Income Statement

The Swatch Group's income statement reflects a volatile revenue trend with recent declines. The gross profit margin remains strong, indicating effective cost management. However, net profit margin has significantly dropped due to reduced net income, impacting overall profitability. EBIT and EBITDA margins have also decreased, highlighting operational challenges.

Balance Sheet

The balance sheet shows a robust equity position with a low debt-to-equity ratio, suggesting financial stability and low leverage risk. The return on equity has decreased, reflecting the drop in net income. The equity ratio remains high, indicating the company is primarily funded by equity, which is a strength.

Cash Flow

The cash flow statement indicates decreasing operating cash flow and negative free cash flow, leading to concerns about liquidity. The operating cash flow to net income ratio suggests cash generation issues. The declining free cash flow growth rate poses a risk to future financial flexibility.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.74B	7.89B	7.50B	7.31B	5.59B
Gross Profit	5.60B	6.33B	3.10B	2.89B	1.62B
EBITDA	768.00M	1.55B	1.44B	1.43B	455.00M
Net Income	193.00M	869.00M	807.00M	765.00M	-51.00M
Balance Sheet
Total Assets	13.99B	14.23B	13.89B	13.68B	12.90B
Cash, Cash Equivalents and Short-Term Investments	1.40B	2.05B	2.55B	2.66B	1.79B
Total Debt	13.00M	75.00M	6.00M	99.00M	91.00M
Total Liabilities	1.77B	1.97B	1.84B	2.07B	1.93B
Stockholders Equity	12.11B	12.20B	11.98B	11.54B	10.90B
Cash Flow
Free Cash Flow	-216.00M	-170.00M	325.00M	995.00M	566.00M
Operating Cash Flow	333.00M	615.00M	724.00M	1.30B	819.00M
Investing Cash Flow	-470.00M	-768.00M	-114.00M	-727.00M	-126.00M
Financing Cash Flow	-410.00M	-327.00M	-300.00M	-234.00M	-251.00M

The Swatch Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 158.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:UHR, the sentiment is Positive. The current price of 158.35 is above the 20-day moving average (MA) of 136.96, above the 50-day MA of 137.65, and above the 200-day MA of 151.78, indicating a bullish trend. The MACD of 4.04 indicates Negative momentum. The RSI at 81.30 is Negative, neither overbought nor oversold. The STOCH value of 96.23 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:UHR.

The Swatch Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CFR	72 Outperform	CHF81.71B	31.78		1.94%	2.80%	―
Sector *	57 Neutral	HK$26.40B	4.14	-2.03%	5.51%	-0.23%	-68.02%
UHR	55 Neutral	$8.28B	132.55	0.49%	2.84%	-13.19%	-88.43%