Richemont: Solid start to the year
BUY, Fair Value CHF95 vs. CHF82 (+7%)
Unlike other luxury groups that recently posted disappointing numbers, Richemont clearly posted yesterday reassuring current trading with accelerating sales growth in April (+12% LFL vs. +9% in Q4) on top of the most demanding comparison base of the year. Hence we are adopting a more optimistic forecast for FY14 (ended 31 March 2015) with 10% LFL growth (vs. 8% previously) and we now expect the EBIT margin to reach 24.3% (+40pb). Furthermore, we also apply the new risk-free rate implemented at BG. FV increased to CHF95 vs. CHF82. Buy reiterated.
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