Richemont : Oddo BHF revises forecasts with China in mind

(CercleFinance.com) - The analyst believes that the group's Q1 sales (FY to end-March 2025) should be affected by persistent weakness in Asia.


We shouldn't expect any improvement, given recent indications from companies in the sector concerning China, and also a difficult basis for comparison (y/y cc growth of 40% last year, after 25% in the previous quarter), Oddo BHF says.

The broker has reduced its forecast for the region from -8% to -14% for Q1, and while it has raised its estimates for Japan and the Middle East, total group sales growth at cc for this quarter is now expected at +0.7%, vs. 2.9% previously.

By division, analysts have trimmed their growth forecast for Maisons Joaillères from +4% to +2.5%, but it is mainly in Horlogers Spécialisés that the weakness in Asia was likely to be most visible, resulting in an estimated Q1 decline of -5% now (we were expecting -1%), Oddo BHF says.

According to the analyst, Maisons Joaillères, which accounts for the bulk of the group's profits, should be able to offset the weakness in Asia with a more satisfactory trend in other zones, notably Europe and the US.

For the financial year ending March 2025, we expect annual growth at cc of +5%, compared with 5.8% previously (Jewelry Houses at +6.2%, Specialized Watchmakers at +1.2%), and a Group EBIT margin of 23.7% (compared with 23.8%). For March 2026, Group growth is slightly lowered to 6.5% from 6.8% (Maisons Joaillères to +7.5% from 8%, Horlogers Spécialisés to +3.5%), but the EBIT margin is expected to remain unchanged at 24.6%. All in all, the revision made to annual group EBIT remains contained at -1% over the next three years, Oddo BHF adds.

The analyst considers that the share looks cheap in view of the position held in jewelry, confirming a Buy rating on the stock, with a target price of 158 CHF.

Its multiple discount to the LVMH benchmark has narrowed to -12%, without completely disappearing, and its multiples remain at relatively modest levels in absolute terms (P/E on March 25e close to 21x, P/E on March 26e close to 19x).


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