Natasha Bonnet, an analyst from Morgan Stanley, maintained the Hold rating on The Swatch Group (SWGAF – Research Report). The associated price target is CHF190.00.
Natasha Bonnet has given her Hold rating due to a combination of factors impacting The Swatch Group’s financial outlook and market position. She identifies a lack of compelling long-term growth narrative due to structural challenges the company faces, such as overexposure to the lower-end market segment and reliance on Chinese demand, which accounts for a significant portion of sales. Furthermore, Bonnet cites an anticipated contraction in the Watches & Jewelry (W&J) sector and a decline in Swatch brand sales as key reasons for her cautious stance.
Additionally, Bonnet’s analysis suggests that The Swatch Group’s profitability will be negatively affected by currency exchange headwinds and a cost structure that may not be optimized, considering the company’s high degree of vertical integration and operations in a high-cost labor country. Despite these concerns, the stock’s valuation, which trades below net asset value (NAV) and at historically low price-to-earnings ratios, along with a strong asset backing, provides a potential safety net for the stock price. These mixed financial indicators underpin the rationale for maintaining a Hold rating rather than a more bullish or bearish position.
According to TipRanks, Bonnet is ranked #5561 out of 8728 analysts.
In another report released on April 2, Kepler Capital also maintained a Hold rating on the stock with a CHF220.00 price target.
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The Swatch Group (SWGAF) Company Description:
The Swatch Group AG engages in the design, manufacture, and sale of finished watches, jewelry, watch movements, and components. It operates through the Watches & Jewelry, and Electronic Systems segments. The Watches & Jewelry segment is involved in the designs, production, and marketing of watches and jewelry. The Electronic Systems segment develops, manufactures, and sells electronic components; and sports timing activities. The company was founded by Nicolas Georges Hayek in 1983 and is headquartered in Biel, Switzerland.
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