The Swatch Group (UHR) AI Stock Analysis

• Market Cap: CHF7.71B
• Dividend Yield: 4.14%
• Average Volume (3M): 234.38K
• Price to Earnings (P/E): 39.7
• Beta (1Y): 0.87
• Revenue Growth: -14.62%
• EPS Growth: -77.71%
• Country: CH
• Employees: 32,477
• Sector: Consumer Cyclical
• Sector Strength: 77
• Industry: Luxury Goods
• EPS (TTM): 1.10
• Shares Outstanding: 28,936,000
• 10 Day Avg. Volume: 172,422
• 30 Day Avg. Volume: 234,382
• PEG Ratio: -0.59
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -32.97
• 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: CHF136.25
• Price Target Upside: -8.10% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

The Swatch Group's overall stock score reflects strong financial stability with a robust balance sheet, balanced by challenges in revenue and cash flow. Technical analysis indicates bearish momentum, while the high P/E ratio raises valuation concerns despite a strong dividend yield. Investors should be cautious of operational challenges impacting profitability and liquidity. The absence of recent earnings call data limits insight into management's outlook and strategy.

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 watchmaker and one of the largest manufacturers of finished watches in the world. The company operates across various segments, including luxury, premium, and basic watch brands. It owns a range of prestigious watch brands, such as Omega, Longines, Tissot, and its namesake, Swatch. The Swatch Group is also involved in the production of watch movements and components, serving both its brands and external clients. Additionally, the company has a presence in the electronic systems sector, providing microelectronics and time-related products.

How the Company Makes Money

The Swatch Group generates revenue primarily through the sale of watches and jewelry under its various brand names, with a significant portion of its income coming from its luxury and premium watch brands. The company also earns money by manufacturing and selling watch movements and components to third-party brands, ensuring a diverse revenue stream. Furthermore, Swatch Group's electronics segment contributes to its earnings by producing components and systems for various time-related applications. Strategic partnerships and collaborations with other luxury brands and retailers enhance its market position and sales channels, further bolstering its revenue.

The Swatch Group Financial Statement Overview

Summary

The Swatch Group's financial performance shows a strong balance sheet with low leverage, which is a positive indicator of financial stability. However, declining revenue, profitability, and cash flow present significant challenges. Despite effective cost management maintaining strong gross profit margins, operational issues have led to decreased EBIT and EBITDA margins.

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
	EBIT
304.00M	1.19B	1.03B	989.00M	-8.00M
	EBITDA
768.00M	1.55B	1.44B	1.43B	455.00M
	Net Income Common Stockholders
193.00M	869.00M	807.00M	765.00M	-51.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.40B	2.05B	2.55B	2.66B	1.79B
	Total Assets
13.99B	14.23B	13.89B	13.68B	12.90B
	Total Debt
13.00M	75.00M	6.00M	99.00M	91.00M
	Net Debt
-1.09B	-1.61B	-2.17B	-1.88B	-1.49B
	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: Neutral
• Last Price: 148.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:UHR, the sentiment is Neutral. The current price of 148.25 is above the 20-day moving average (MA) of 141.28, below the 50-day MA of 149.09, and below the 200-day MA of 163.98, indicating a neutral trend. The MACD of 0.19 indicates Negative momentum. The RSI at 58.00 is Neutral, neither overbought nor oversold. The STOCH value of 89.13 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	65 Neutral	CHF91.02B	72.69		1.77%	-2.34%	-51.68%
UHR	63 Neutral	CHF7.71B	39.70	1.57%	4.14%	-14.62%	-77.71%
Sector *	61 Neutral	$6.98B	11.29	2.93%	3.90%	2.60%	-21.72%