CFRHF - Richemont: The Recovery Isn't Convincing Enough
2024-03-09 09:07:09 ET
Summary
- In line with the recent luxury rally, Richemont's stock price has increased by 32.5% since November 2023, despite warnings of slowing sales in Europe.
- To be fair, some improvement has been seen in sales growth in Q3 FY24, supported by China's recovery and a surprising spurt in the Americas' demand.
- But with the macro outlook somewhat concerning, the recent improvement can't be taken for granted. And the stock's now elevated market multiples don't help either.
Since the last time I wrote about the Swiss luxury company and Cartier owner Compagnie Financière Richemont ( CFRUY ) ( CFRHF ) in November last year, its price is up by 32.5%. At the time I had gone with a Hold rating on the stock based on its weakening performance, especially at actual exchange rates [AER] in the second quarter of its current financial year (Q2 FY24, year ending March 2024). Also, the company itself warned of slowing sales in Europe, its second-biggest market, which suggested potential weakness going forward....
Richemont: The Recovery Isn't Convincing Enough