Swatch Results Show a Slow Demand Recovery and Improved Cash Generation; Shares Fairly Valued
We retain our narrow moat rating and fair value estimate for Swatch after it reported results that slightly missed our and consensus estimates. We believe Swatch shares are fairly valued at current levels.ÂSwatch saw a tepid recovery in its watch and jewellery segment sales, with 2.9% growth for its own products but continuing strong declines in third-party component sales. As a result, constant-currency sales grew by 1.2%, short of our 2% estimate.
Operating margins improved from 9.5% to 10%,...
Swatch Group is active in finished watches and jewelry sector with 20 brands in all market and price brackets. In addition, Co. is engaged in the sector of watch movements and components production as well as in the electronic systems sector. Co.'s operations can be divided into two segments: Watches & Jewelry, which is engaged in the production and sale of watches and jewelry; and Electronic Systems, which is engaged in the design, production and commercialization of electronic components, sports timing activities. Co. manufactures and sells watches under the following brands, among others: Breguet, Harry Winston, Blancpain, Glashutte Original, Jaquet Droz, Leon Hatot, and Omega.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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