CFR SW
Compagnie Financière Richemont SA
Consumer
02/04/2020
Presented
| Date | 01/29/2020 |
| Price | CHF73.44 |
| Market Cap | $43.10B |
| Ent Value | $45.12B |
| P/E Ratio | 26.46x |
| Book Value | CHF32.83 |
| Div Yield | 2.72% |
| Shares O/S | 564.97M |
| Ave Daily Vol | 2,074,734 |
| Short Int | N/A |
Current
| Price | CHF127.85 |
| Market Cap | $77.74B |
| Compagnie Financière Richemont SA engages in the design, manufacture, and distribution of luxury goods. It operates through the following segments: Jewellery Maisons, Specialist Watchmakers, Online Distributors, and Other. The Jewellery Maisons segment produces jewellery products which include Cartier and Van Cleef & Arpels. The Specialist Watchmakers segment offers precision timepieces, which comprises Piaget, A. Lange & Sohne, Jaeger-LeCoultre, Vacheron Constantin, Officine Panerai, IWC Schaffhausen, Baume & Mercier, and Roger Dubuis. The online Distributors segment relates to online sale of luxury goods through YNAP and Watchfinder. The Other segment include Montblanc, Alfred Dunhill, Chloé, Peter Millar, Azzedine Alaia, investment property companies, and other manufacturing entities. The company was founded by Johann P. Rupert in September 1988 and is headquartered in Bellevue, Switzerland. |
Publicly traded mentioned companies herein: Compagnie Financière Richemont SA (CFR SW), LVMH Moet Hennessy Louis Vuitton SE (MC:FP)
Highlights
The presenter is long shares of Compagnie Financière Richemont SA (CFR SW) as he believes the market is underappreciating consistent sales growth from its jewelry segment while mistakenly looking at CFR merely as a “watch company.” Shares are trading at CHF75 or 10.6x 2022 consensus EBITDA, a discount to other companies in the luxury goods industry. He sees CFR outperforming current street expectations and its EBITDA multiple expanding to mid-to-high teens. He models a price target of CHF150 on the high end in the next 18-24 months, representing 100% upside from current prices.
CFR engages in the manufacturing and retail of luxury goods through three primary segments, namely: jewelry (e.g., Cartier, Van Cleef), specialty watches (e.g., IWC, Piaget.), writing instruments and other segments (e.g., Mont Blanc, Chloé). CFR’s business also includes 90% of online distributor Yoox Net-a-Porter, an acquisition which was completed in 2018 for $3.3B. While Net-a-Porter is a loss incurring business, the presenter believes the market is overestimating the losses since the company is running amortization on P&L. At the same time, the market is underappreciating the jewelry segment which has seen strong growth numbers over the last 6 years.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.