The Swatch Group (UHR) AI Stock Analysis

• Market Cap: $7.71B
• Dividend Yield: 3.04%
• Average Volume (3M): 137.81K
• Price to Earnings (P/E): 127.8
• Beta (1Y): 0.92
• Revenue Growth: -13.19%
• EPS Growth: -88.43%
• Country: CH
• Employees: 32,477
• Sector: Consumer Cyclical
• Sector Strength: 81
• Industry: Luxury Goods
• EPS (TTM): 0.06
• Shares Outstanding: 28,936,000
• 10 Day Avg. Volume: 151,158
• 30 Day Avg. Volume: 137,814
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.74
• Enterprise Value/Revenue: 0.85
• Enterprise Value/Gross Profit: 1.02
• Enterprise Value/Ebitda: 7.68
• 1Y Price Target: $118.70
• Price Target Upside: -19.28% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 10

• Rating: 65 Neutral
• Price Target: CHF162.00 ▲(10.17% Upside)

The Swatch Group's strong financial stability is overshadowed by declining profitability and cash flow issues. Technical indicators show positive momentum, but the high P/E ratio suggests overvaluation risks. Investors should be cautious of the financial challenges despite the positive technical trends.

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 leading Swiss manufacturer of watches and jewelry, comprising several well-known brands including Swatch, Omega, Longines, and Breguet. Founded in 1983, the company operates in the luxury and mid-range watch segments, offering a diverse range of products that cater to various customer preferences and price points. The Swatch Group also engages in the production of watch movements and components, making it a key player in the global watchmaking industry.

How the Company Makes Money

The Swatch Group generates revenue primarily through the sale of its watches and jewelry across its various brands. The company has a diverse revenue model that includes retail sales through its own boutiques, e-commerce platforms, and partnerships with authorized retailers. Key revenue streams come from the luxury segment, where high-end brands like Omega and Breguet command premium pricing, while mid-range brands like Swatch offer volume sales. Additionally, the company earns income from the manufacturing and supply of watch movements and components to other watch brands, contributing significantly to its overall earnings. Strategic partnerships and collaborations, such as limited edition releases and exclusive collections, also enhance brand visibility and drive sales, further bolstering the company's financial performance.

The Swatch Group Financial Statement Overview

Summary

The Swatch Group shows strong equity and low leverage, indicating financial stability. However, declining revenue, profitability, and cash flow pose significant risks that need addressing.

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: 147.05
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 147.05 is above the 20-day moving average (MA) of 142.45, above the 50-day MA of 140.86, and below the 200-day MA of 148.02, indicating a bullish trend. The MACD of 1.25 indicates Negative momentum. The RSI at 58.10 is Neutral, neither overbought nor oversold. The STOCH value of 36.83 is Neutral, 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	77 Outperform	CHF84.61B	32.39		1.90%	2.80%	―
UHR	65 Neutral	$7.71B	127.80	0.49%	3.04%	-13.19%	-88.43%
Sector *	61 Neutral	$17.92B	12.81	-2.97%	2.98%	1.30%	-14.28%