Richemont

Compagnie Financière Richemont SA, BUY recommendation with a target price of CHF 185, driven by the long-term cash generation of Cartier and Van Cleef & Arpels against cyclical watchmaking headwinds.

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Recommendation

BUY

Target Price

CHF 185

Methodology

DCF

Investment Thesis

The valuation is primarily derived from a Discounted Cash Flow (DCF) analysis, which accounts for the long-term cash generation of Richemont's premier Jewellery Maisons, Cartier and Van Cleef & Arpels, against cyclical headwinds in the watchmaking segment. The Jewellery Maisons represent a structurally superior business with strong pricing power, inelastic demand among UHNW clients, and a moat built over decades of brand equity.

Methodology

Discounted Cash Flow

Primary valuation anchored on long-term free cash flow projections for the Jewellery Maisons, discounted at a WACC reflecting Richemont's balance sheet strength and low leverage.

Segment Analysis

Separate treatment of the Specialist Watchmakers division to capture near-term cyclical pressure on Swiss watch exports and Chinese consumer sentiment.

Comparable Companies

Cross-validation using EV/EBITDA and P/E multiples against luxury peers including LVMH and Hermès.