Analysts covering Watches of Switzerland Group have raised their price targets, with new ranges now stretching from 650 GBp to 850 GBp across the firms providing coverage.
A revised fair value estimate of £6.62 has emerged from one valuation model, up from a prior estimate of £5.41, reflecting a meaningful shift in how the stock is being assessed.
UBS has upgraded Watches of Switzerland Group to a Buy rating, lifting its price target to 850 GBp from 600 GBp, placing it at the top of the current analyst target range.
The UBS upgrade points to structural U.S. luxury trends and what the firm views as a favorable brand mix as key reasons why earnings could have room for further upgrades.
RBC Capital has also raised its price target on Watches of Switzerland Group to 650 GBp from 560 GBp, placing its view toward the middle of the range among current analyst targets.
Despite the higher target, RBC Capital maintains a Sector Perform rating, signaling a more cautious stance and stopping short of framing the stock as clearly ahead of peers.
The updated valuation model reflects several adjusted assumptions, including a revenue growth estimate moving to 8.32% from 7.04% and a profit margin assumption rising to 6.61% from 6.04%.
The future price-to-earnings multiple used in the model has been updated to 14.0x from 12.46x, while the discount rate has been reduced to 9.43% from 10.27%.
Factors expected to shape future revenue and margins include U.S. showroom expansion, luxury jewelry growth, and the Roberto Coin acquisition, all of which remain closely watched by analysts.
The integration of Hodinkee and the Rolex Certified Pre-Owned program are also considered relevant in shaping the company’s online, pre-owned, and higher-end sales mix going forward.
Analysts have flagged potential headwinds including higher finance costs, a higher effective tax rate, slower U.K. growth, and capital-intensive store projects that could weigh on earnings and cash flow.
The mix of bullish upgrades and cautious ratings reflects a broader debate among analysts about whether current optimism around luxury trends is already priced into the stock.
