Richemont’s Strong Jewelry Brand Performance and Growth Prospects Justify Buy Rating Despite Inflationary Pressures

TD Cowen analyst Oliver Chen maintained a Buy rating on Compagnie Financiere Richemont SA today and set a price target of CHF190.00.

Oliver Chen has given his Buy rating due to a combination of factors including the strong performance of Richemont’s jewelry brands, Cartier and Van Cleef, which constitute a significant portion of the company’s revenue. The analyst highlights the company’s ability to capitalize on the growing consumer preference for branded jewelry, which is expected to outpace general luxury goods spending. Additionally, the wealth effect from high-income consumers, bolstered by significant growth in the S&P over the past two years, is seen as a positive driver for Richemont’s sales.
Despite inflationary pressures, particularly from rising gold prices, Chen remains optimistic about Richemont’s long-term growth prospects. The company is expected to benefit from price increases and robust demand, with organic sales growth projected to exceed market expectations. Furthermore, Richemont’s strong brand presence and regional growth, especially in China, are seen as key factors supporting the Buy rating. The analyst acknowledges potential risks, such as recent stock price fluctuations, but believes these are outweighed by the company’s solid topline growth potential.

In another report released on October 28, Kepler Capital also maintained a Buy rating on the stock with a CHF165.00 price target.

Based on the recent corporate insider activity of 15 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CFR in relation to earlier this year.