(News Bulletin 247) – Oddo BHF reiterates its ‘underperformance’ recommendation on Swatch Group, despite a price target raised from 260 to 269 Swiss francs in the wake of an increase in its short-term forecast for the watch manufacturer .
After ‘flattering first-half results despite the foreign exchange effect (organic growth at +18%, EBIT margin up compared to the second half of 2022)’, the design office is raising its annual results forecast by +6 % on average.
While it acknowledges having underestimated the Swiss group’s potential for a rebound in 2023, Oddo BHF nevertheless states that it remains cautious about the medium-term growth potential of its consumer brands.
‘On the other hand, the group is now beginning to approach the level of long-term normative margin that we take into account in its valuation by DCF (18%) and we are not convinced that it can exceed it in the long term’, he adds.
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