Richemont: Oddo BHF remains positive, but cuts TP

(CercleFinance.com) - Oddo BHF reiterates its 'outperform' rating on Richemont shares, despite lowering its target price from 144 CHF to 136 CHF, following H1 results that clearly mark a disappointment on margins due to a more unfavourable sector cycle.


The sharp downturn in China clearly impacted the group's overall margins over the half-year, as it did not halt its investments to promote and distribute its brands, even if it means moderating them later if the difficulties persist, the analyst adds.

A resetting of its margin assumptions has led Oddo BHF to reduce its earnings estimates (-5/-6% on annual EBIT forecasts) for the Swiss luxury group, but it reaffirms its confidence in the strength of its jewelry positions.

The Cartier Van Cleef group (to which we must add Buccellati and, more recently, Vhernier) is maintaining solid positive growth despite double-digit declines in Asia, and its long-term outlook remains favorable, it explains.


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