Richemont: Bernstein cuts target price
(CercleFinance.com) - Bernstein has cut its target price for Richemont from 100 Swiss francs to 90 Swiss francs, while maintaining its "outperform" recommendation on the stock, saying that Tiffany's takeover by LVMH has "dramatically" changed the industry context.
In a note to clients, the broker said Richemont could either be a "M&A darling" or a "value trap."
"With LVMH out of the picture, the best M&A option (...) could be a tie-up with Chanel," it wrote in the note.
However, the broker deems that alternative M&A scenarios are less likely, such as a merger with Kering or Hermès.
With no M&A, Richemont could become a value trap, as competition is increasing, it warned.
"Material upside (...) would only materialise short term, in case our industry consolidation scenarios would take place," it added.
The Richemont stock is currently up 0.4% at 76.8 Swiss francs.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
In a note to clients, the broker said Richemont could either be a "M&A darling" or a "value trap."
"With LVMH out of the picture, the best M&A option (...) could be a tie-up with Chanel," it wrote in the note.
However, the broker deems that alternative M&A scenarios are less likely, such as a merger with Kering or Hermès.
With no M&A, Richemont could become a value trap, as competition is increasing, it warned.
"Material upside (...) would only materialise short term, in case our industry consolidation scenarios would take place," it added.
The Richemont stock is currently up 0.4% at 76.8 Swiss francs.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.