UBS adjusts its price target on Richemont from 58 to 61 Swiss francs and remains "neutral" on the title, as we approach the publication of annual results of the Swiss luxury group, on Thursday.
For the year 2010-11, the broker expects organic sales growth of 19%, with a slowdown at end of period (+12% over the fourth quarter alone) due to a hardening of the base of comparison.
UBS expects an operating profit of 1.425 million euros, representing a margin of 20.9%, an improvement of 490 basis points. The highest margin was achieved in the jewelry (31%), followed by watches (24%) and writing instruments (17%).
"Given the strength displayed so far in the publications of European players in the luxury, we think that Richemont figures might surprise rather in the right direction, "said the broker.
For the year 2010-11, the broker expects organic sales growth of 19%, with a slowdown at end of period (+12% over the fourth quarter alone) due to a hardening of the base of comparison.
UBS expects an operating profit of 1.425 million euros, representing a margin of 20.9%, an improvement of 490 basis points. The highest margin was achieved in the jewelry (31%), followed by watches (24%) and writing instruments (17%).
"Given the strength displayed so far in the publications of European players in the luxury, we think that Richemont figures might surprise rather in the right direction, "said the broker.
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