Richemont’s shares trade on the SIX Swiss Exchange under the ticker symbol (SWX: CFR). They are also included in the Swiss Market Index (SMI) of leading stocks.
Compagnie Financière Richemont, commonly known as Richemont, is a well-known Swiss luxury goods company. It was founded in 1988 through the spin-off of the international assets owned by Rembrandt Group Limited of South Africa (now known as Remgro Limited). Today, Richemont is a titan in the global luxury market.
The current Richemont Chief Executive Officer is Johann Rupert, who took on the role in September 2018.
Richemont boasts a diverse portfolio of luxury brands across various sectors, including jewellery, watches, and fashion and accessories. The company focuses on acquiring established brands with strong heritage and growth potential. These brands operate independently. Some of the company’s most renowned brands include Cartier, Jaeger-LeCoultre, Van Cleef & Arpels, Panera, Purdey, MontBlanc, Piaget and Chloé.
YOUR CAPITAL IS AT RISK
Richemont EPS and Revenue Breakdown 2020-2023
| Richemont | Annual EPS | Annual Revenue |
|---|---|---|
| 2020 | €1.646 | €14.24 billion |
| 2021 | €2.296 | €13.14 billion |
| 2022 | €3.611 | €16.75 billion |
| 2023 | €0.543 | €19.95 billion |
Richemont Share Price & Dividend Yield
While the Richemont share price seems to have slightly stalled over the past couple of years, ranging since late 2021, the stock has, overall, performed well over the years and is now well above the lows it fell to at the beginning of the pandemic.
Richemont is a dividend-paying stock. The current dividend yield is 2.7%
YOUR CAPITAL IS AT RISK
Richemont Share Price Forecast
According to data compiled by TradingView, out of 30 analysts giving a stock rating to Richemont over the last three months, 18 have assigned it a Buy or Strong Buy rating, while 12 have given the stock a Hold rating. Out of 28 analysts offering a one-year price forecast, the average price target estimate is CHF 151.
Early this year, Richemont was downgraded to Hold from Buy at HSBC with a new price target of CHF 141, up from CHF 138. The bank told investors in a research note that they see the company’s momentum slowing after its third-quarter results.
Meanwhile, Bernstein raised its rating for Richemont to Outperform from Market Perform, assigning the stock a new price target of CHF 153. The investment firm highlighted Richemont’s leadership in the jewelry category and the more prominent relative appeal of jewelry against handbags, which has experienced more subdued price increases in the past few years, as reasons for upgrading Richemont.
Our View: Richemont is a solid dividend-paying stock with several well-known and established brands, making it appealing to income-focused investors. However, if you look further into the stock, current headwinds impacting the luxury goods industry should be considered.
Who Should Buy Richemont Shares?
Richemont’s focus on acquiring established luxury brands suggests potential for long-term growth, and so investors with a longer-term time horizon may be more suited to the stock. If you have an optimistic outlook on Richemont, or are looking for top Swiss stocks, and have a long investment horizon, the stock could be a good fit.
The luxury goods market experiences ups and downs tied to economic conditions and consumer spending. Evaluate your comfort level with this inherent volatility and your risk tolerance before investing.
Richemont offers a dividend, providing a potential income stream and an attractive option for income-focused investors. Analyse Richemont’s dividend history and future payout projections to see if they align with your income needs.
Investing in Richemont requires a moderate to high-risk tolerance as the luxury goods market is cyclical, meaning its performance is tied to economic conditions. During economic downturns, consumer spending on luxury goods tends to decline, impacting Richemont’s profits.
Investors comfortable with market fluctuations might be better suited for Richemont. In addition, with Richemont’s success heavily reliant on the continued strength and performance of its acquired brands, changes in consumer preferences or brand missteps could negatively impact the company’s overall performance.
