Swatch: Credit Suisse cuts target price

(CercleFinance.com) - Credit Suisse has cut its target price for the Roche share from 270 Swiss francs to 250 Swiss francs, while confirming a Neutral rating.


"We cut our FY20e and FY21e operating profit forecasts by 25% and 3% respectively. We now forecast SFr733m operating profit in FY20e," the broker says.

Analysts say that this largely reflects the disruption caused by COVID-19, as well as the strength of the Swiss franc.

Credit Suisse also says that HK/China and Chinese consumers respectively represented 35% and 50% of FY 2019 sales.

"First, watch exports and consumer demand in Asia have decoupled since 3Q19 leading to inventory turns in the trade deteriorating to >260 days in 4Q19 globally against 180 days on normalized levels," Crédit Suisse explains.

"We forecast a 10% drop in 1H organic sales. This brings our operating margin estimates to 9.5% in FY20e and 12.1% in FY21e, down from 12.4% in FY19," analysts add.



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