Compagnie Financière Richemont SA: No Catalyst To Drive A Near-Term Re-Rating

Summary

• I rate Compagnie Financière Richemont as hold due to a lack of near-term catalysts for re-rating and macroeconomic uncertainties.
• Jewellery Maisons segment shows resilience and high margins, but overall growth is threatened by potential recession and sector sensitivity to macro pressures.
• The Specialist Watchmakers segment is a major drag, with sales and margins sharply down, especially due to weak Asia Pacific demand and operational deleverage.
• Valuation at 24x NTM P/E is above historical average and in line with peers; I see limited upside until clear signs of demand recovery emerge.

Robert Way

Investment Action

I give a hold rating for Compagnie Financière Richemont SA (CFRHF)(OTCPK:CFRUY) as I don’t see a clear catalyst for re-rating in the near term. The persistent weakness in the specialist watchmakers segment, weakness in the

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.