Richemont: Oddo BHF adjusts target price

(CercleFinance.com) - Group sales totaled E5,268m in Q1, compared with Oddo BHF's expectation of E5,292m and the most recent Visible Alpha consensus of E5,278m.


Organic growth for the quarter was in line at 1% (Oddo BHF was aiming for +0.7%, with the slight shortfall due to exchange rates) and comes after a score of +1.9% in the previous quarter (Q4 of fiscal year to end-March 2024).

It reflects an acceleration in the decline in sales in Asia Pacific to -18% (Q4: -12%), with China at -27%, while trends in Europe and the Americas are still favourable at +5% (Q4: +7%) and +10% (Q4: +12%), and Japan continues to benefit fully from Asian tourism (notably Chinese) at +59% (Q4: 41%), analysts say.

Maisons Joaillères posted an increase of 4% (Oddo BHF expected 2.5%, compared with 3% in the previous quarter), while Horlogers Spécialisés suffered more visibly at -13% (Oddo BHF -5%, the 4th quarter was -1%).

The major decline in sales in Greater China is mainly affecting the watch division, and in view of Swatch Group's H1 results (Underperformance - TP 167 CHF, the double-digit decline in this division is only half a surprise), Oddo BHF says.

The broker is adjusting its forecasts slightly. For the year ending March 2025, organic sales growth is expected to be 4.5% (vs. 5%) and the EBIT margin 23.6% (vs. 23.7%; the previous year's margin was 23.3%), reflecting a Jewelry House division up 6.5% at cc and an EBIT margin of 33.2% (vs. 33.1% in the previous year)'.

For the year ending March 2026, analysts still expect organic sales growth of 6.5% and an EBIT margin of 24.6% (i.e. growth of 7.5% and a margin of 33.7% for Maisons Joaillères), they add.

Oddo BHF confirms its Outperform recommendation on the stock and raises its target price to 161 Swiss francs (from 158 Swiss francs). The recent weakening of the CHF against the euro enables us to raise our target to 161 CHF.

The performance in Jewelry and the resilience of its growth outside China justify a favourable relative opinion.


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