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1. Company Snapshot

1.a. Company Description

The Swatch Group AG designs, manufactures, and sells finished watches, jewelry, and watch movements and components worldwide.It operates through Watches & Jewelry and Electronic Systems segments.The Watches & Jewelry segment designs, produces, and commercializes watches and jewelry.


The Electronic Systems segment is involved in the design, production, and commercialization of electronic components, as well as sports timing activities.It is also involved in the provision of assembly, research and development, administration, watch case polishing, logistics and distribution, and customer services; and hard material products, microelectronics, watch cases and crowns, miniature low-frequency quartz crystals, thin wires, miniature batteries, watch dials and bracelets, watch hands, sports timing technology and equipment, precision parts, and assembly electronic components.In addition, the company engages in retail, communication, real estate project and property management, finance, reinsurance, and art center businesses.


It offers its watch and jewelry products primarily under the Breguet, Harry Winston, Blancpain, Glashütte Original, Jaquet Droz, Léon Hatot, Omega, Longines, Rado, Union Glashütte, Tissot, Balmain, Certina, Mido, Hamilton, Calvin Klein, Swatch, and Flik Flak brands.The Swatch Group AG was founded in 1983 and is headquartered in Biel/Bienne, Switzerland.

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1.b. Last Insights on UHRN

The Swatch Group AG's recent performance has been positively influenced by hopes of a potential tariff cut on Swiss goods. US President Donald Trump's indication of a possible deal to lower US import tariffs on Switzerland has boosted Swiss stocks, including watchmakers. A reduction in tariffs could alleviate pressure on Swiss exporters, such as Swatch Group, which faces a 39% tariff imposed by Trump. Additionally, Trump's meeting with Swiss business leaders and orders for more trade talks may lead to improved trade relations. These developments could benefit Swatch Group's operations.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Swiss Franc, Watchmakers Rise on Hopes for Tariff Cut

Nov -11

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Swiss stocks rise as Trump hints at possible deal to lower U.S. tariffs

Nov -11

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Swiss Franc, Watchmakers Rise on Hopes for Tariff Cut

Nov -11

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Trump Meets Swiss Business Leaders, Orders More Trade Talks

Nov -05

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Swiss Watch Exports Slump in September, Hurt by US Tariffs

Oct -21

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Inside Rolliefest, the 'Super Bowl' of luxury watches

Oct -01

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Swiss Exports to US Collapsed in First Month of 39% Tariff

Sep -18

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Swiss Watch Exports Plunge on Weak China Demand, US Tariffs

Sep -18

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.47%)

6. Segments

Watches and Jewelry

Expected Growth: 3.5%

The 3.5% growth in Watches and Jewelry from The Swatch Group AG is driven by increasing demand for luxury goods, particularly in Asia, and a strong online presence. The segment also benefits from the company's diversified brand portfolio, including Omega, Longines, and Tissot, which appeals to a wide range of consumers. Additionally, innovative products and strategic partnerships contribute to the segment's growth.

Electronic Systems

Expected Growth: 2.8%

The 2.8% growth of Electronic Systems from The Swatch Group AG is driven by increasing demand for smartwatches, wearable devices, and IoT solutions. Additionally, the company's focus on innovation, strategic partnerships, and expansion into new markets contribute to its growth. Furthermore, the rising trend of health and fitness tracking, as well as the need for efficient supply chain management, also support the segment's growth.

Corporate

Expected Growth: 2.2%

The Swatch Group AG's 2.2% corporate growth is driven by its strong brand portfolio, including Omega, Longines, and Tissot, which appeal to a wide range of consumers. Additionally, the company's focus on innovation, quality, and design, as well as its strategic expansion into e-commerce and digital marketing, contribute to its growth momentum.

7. Detailed Products

Swatch Watches

Fashionable and affordable quartz watches with a wide range of styles and designs

Omega Watches

Luxury mechanical watches with high-precision movements and elegant designs

Tissot Watches

Mid-range mechanical and quartz watches with a focus on precision and durability

Longines Watches

Elegant and sophisticated mechanical watches with a rich history and heritage

ETA Movements

High-quality mechanical and quartz movements used in various watch brands

Components and Accessories

Watch components, such as dials, hands, and straps, as well as watch-related accessories

8. The Swatch Group AG's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The Swatch Group AG is moderate, as there are alternative luxury watch brands available in the market, but Swatch's strong brand recognition and quality products help to mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low, as individual customers have limited negotiating power, and Swatch's premium products are often sought after by customers who are willing to pay a premium.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate, as Swatch relies on a few key suppliers for components and materials, but the company's large scale and negotiating power help to mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low, as entering the luxury watch market requires significant investment in brand building, marketing, and distribution, making it difficult for new entrants to compete with established players like Swatch.

Intensity Of Rivalry

The intensity of rivalry is high, as the luxury watch market is highly competitive, with many established players competing for market share, and Swatch must continually innovate and differentiate its products to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.61%
Debt Cost 6.90%
Equity Weight 99.39%
Equity Cost 8.51%
WACC 8.50%
Leverage 0.61%

11. Quality Control: The Swatch Group AG passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
NEXT

A-Score: 5.6/10

Value: 1.8

Growth: 5.7

Quality: 6.7

Yield: 4.4

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Pandora

A-Score: 4.9/10

Value: 4.9

Growth: 7.4

Quality: 7.1

Yield: 4.4

Momentum: 2.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Redrow

A-Score: 4.9/10

Value: 6.7

Growth: 3.8

Quality: 7.4

Yield: 4.4

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Swatch

A-Score: 4.1/10

Value: 5.5

Growth: 1.7

Quality: 4.6

Yield: 5.0

Momentum: 2.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Burberry

A-Score: 3.8/10

Value: 4.0

Growth: 1.9

Quality: 2.2

Yield: 3.8

Momentum: 9.5

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
Brunello Cucinelli

A-Score: 3.8/10

Value: 1.1

Growth: 7.8

Quality: 5.0

Yield: 1.2

Momentum: 4.0

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

33.96$

Current Price

33.96$

Potential

-0.00%

Expected Cash-Flows