Richemont: UBS upgrade boosts share price

(CercleFinance.com) - Shares of Richemont, the Swiss luxury group, gained ground on Monday, in pole position on Zurich's SMI index.


The stock was up over 1.5% in late morning trading, after UBS upgraded its rating from "neutral" to "buy," saying that its long period of undeperformance may be coming to an end.

Over the past five years, the shares have underperformed their peers, with an annualised return of just 5% compared to 19% for the rest of the sector, the broker noted.

However, data suggests that Cartier's brand momentum has sustainably accelerated and profit pressure from its online distributors is now easing, meaning that the real value of the business will be "uncovered," it said.

UBS has therefore raised its target price for the share from 73.6 Swiss francs to 94.5 Swiss francs.

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