Richemont
Note: This is a daily stock update and the information stands true as of 16/07/25, 09:00 CET.
Company Update:
Expert Opinion:
Our reduce rating is based on the limited upside in the name as valuation remains expensive with PE26 (March) and PE27 at 23.5x and 20.4x respectively. Furthermore, the current environment is also unfavorable with still low discretionary spending. Yet, the assets owned by Richemont are second to none in terms of brand recognition. While the legal structure means that there can be no hostile takeover, there are questions regarding the future of Richemont. This is an asset that will eventually fetch a higher valuation and our expert wouldn't be surprised if at some point LVMH tries to acquire the company. He would buy and hold Richemont for the long run.
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Company Update:
Total revenue grew by 6% yoy organically (+3% yoy as reported) to €5.4bn, despite a volatile macroeconomic environment and softer consumer sentiment globally. This is marginally better than theconsensus expectation at +5.5%.
The Jewelry Maisons delivered a third consecutive quarter of double-digit growth (+11% yoy organically), driven by the strong brand equity of Cartier and Van Cleef & Arpels, as well as the investment appeal of more durable precious metals.
Specialist Watchmakers saw another decline of 7% yoy, remaining under pressure from the ongoing downturn in the watch market in Greater China.
Strong double-digit growth in the Americas (+17% yoy), Europe (+11% yoy) and Middle East & Africa (+17% yoy) was offset by a contraction in Japan (-15% yoy) and a flat performance in Asia Pacific. Please note that Japan suffered from a very strong comp base (+ 59% growth in Q1 last year). A 7% sales contraction in Greater China was offset by strong double-digit growth in South Korea and Australia.
In all, a strong start of the year for Richemont.
Our reduce rating is based on the limited upside in the name as valuation remains expensive with PE26 (March) and PE27 at 23.5x and 20.4x respectively. Furthermore, the current environment is also unfavorable with still low discretionary spending. Yet, the assets owned by Richemont are second to none in terms of brand recognition. While the legal structure means that there can be no hostile takeover, there are questions regarding the future of Richemont. This is an asset that will eventually fetch a higher valuation and our expert wouldn't be surprised if at some point LVMH tries to acquire the company. He would buy and hold Richemont for the long run.
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
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Alphavalue Morning Market Tip
Weak Q2 earnings as expected - FY Production guidance upgraded.
