The Watches of Switzerland Group "Still Ticking Higher, Upgrade to Buy" (Buy)

研报英文原文证据摘录

The Watches of Switzerland Group "Still Ticking Higher, Upgrade to Buy" (Buy)

ed) (GBP)

growth in FY27E (vs. +5–10% guidance, +8% cons), driven by continued US strength.

From To % ch Cons.

Looking ahead, WOSG’s stronger pricing, supported by its mix (Rolex >50% of sales), 04/26E 0.43 0.43 0 0.43

should contrast with more muted sector pricing, underpinning further ASP growth 04/27E 0.50 0.50 0 0.50

(Rolex +MSD% ytd vs. UBS +LSD%, >Access Dataset), while its supply-driven model 04/28E 0.54 0.58 6 0.55

supports resilient volumes and enables it to capture the category tailwind.

Zuzanna Pusz, CFA

...with further support from inorganic optionality given market fragmentation Analyst

zuzanna.pusz@ubs.com

Our proprietary US luxury watch retailing analysis highlights the fragmented nature of +39 027 2100 226

the US luxury watch retailing landscape. We estimate that for key wholesale-driven

Robert Krankowskibrands, ~60% of total stores on avg are unique banners, with WOSG on avg operating

Analyst

<10% of total doors. Amid generational shifts of family-owned retailers, WOSG is likely robert.krankowski@ubs.com

to benefit from further distribution consolidation. This in turn adds to the growth +44-20-7568 1152

prospects of CPO and Roberto Coin rollout, all within the WOSG ecosystem.

Valuation: Upgrade to Buy, GBp850 price target (+42%)

WOSG trades on 14.6x and 12.6x cal. 2026E and 2027E P/E for 3-yr sales and EPS (pre-

IFRS 16) CAGRs (26E-29E) of +8% and +13%, respectively. Our PT (an avg of DCF and

rel P/E) chg is driven by: 1) EPS changes; 2) raised DCF terminal growth, outer year sales

growth, and terminal EBIT margin; 3) increased target P/E multiple to ~15x (vs. ~12x

previously) due to sector re-rating and narrowed relative valuation discount. US luxury