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Compagnie Financiere Richemont SA Class A CFR

Morningstar Rating
CHF 138.95 −0.70 (0.50%)
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Company Report

Richemont Displays Resilience in a Slowdown

Wide-moat Richemont is the number-three global luxury goods conglomerate by revenue. Over the years, the group has amassed and developed a portfolio of very successful global brands, mostly in the hard luxury segment. Despite more pronounced cyclicality, hard luxury goods benefit from much longer product cycles and lower fashion risk. Most of the group’s brands are at least a century old, have iconic collections lasting 40-80 years, and have historically commanded significant pricing power. Prices of more than $5,000 for most of Richemont’s watch brands and the prestige value attached to them protect the group’s watch business from the emerging technological disruption. Additionally, control over distribution and higher entry barriers in the jewellery business, along with diversification by brand, give us confidence that the company will be able to generate economic profits well into the future, despite cyclicality.

Price vs Fair Value

CFR is trading at a 261% premium.
Price
CHF 138.95
Fair Value
CHF 385.00
Uncertainty
High
1-Star Price
CHF 411.60
5-Star Price
CHF 58.70
Economic Moat
Lktc
Capital Allocation
Hzzdbvq

Bulls Say, Bears Say

Bulls

Richemont's jewellery brand is one of the strongest, most profitable, and one of the faster growing in an attractive high-end jewellery niche with a good growth profile and high entry barriers.

Bears

Richemont is invested in a number of smaller, lagging brands in apparel and leather that pull down returns on capital.

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News

Trading Information

Previous Close Price
CHF 139.65
Day Range
CHF 137.40139.40
52-Week Range
CHF 102.95154.00
Bid/Ask
CHF 0.00 / CHF 0.00
Market Cap
CHF 81.33 Bil
Volume/Avg
2.1 Mil / 906,070

Key Statistics

Price/Earnings (Normalized)
16.13
Price/Sales
4.06
Dividend Yield (Trailing)
1.80%
Dividend Yield (Forward)
1.98%
Total Yield
1.80%

Company Profile

Richemont is a luxury goods conglomerate with 20 brands. Jewellery and watch brands make up 86% of sales, but the group is also active in accessories, writing instruments, clothing and online luxury retail. Richemont’s Jewellery Maisons, including Cartier and Van Cleef & Arpels, account for 69% of revenue and vast majority of profits. Its other brands include Vacheron Constantin, Piaget, Jaeger-LeCoultre, IWC Schaffhausen, Lange & Soehne, Officine Panerai, Chloe, and Montblanc.
Sector
Consumer Cyclical
Industry
Luxury Goods
Stock Style Box
Large Core
Total Number of Employees
37,117

Competitors

Valuation

Metric
CFR
UHR
RMS
Price/Earnings (Normalized)
16.1311.2649.32
Price/Book Value
4.070.8014.89
Price/Sales
4.061.2316.87
Price/Cash Flow
15.666.9244.20
Price/Earnings
CFR
UHR
RMS

Financial Strength

Metric
CFR
UHR
RMS
Quick Ratio
1.802.503.58
Current Ratio
2.658.614.40
Interest Coverage
10.78278.7599.32
Quick Ratio
CFR
UHR
RMS

Profitability

Metric
CFR
UHR
RMS
Return on Assets (Normalized)
8.89%6.27%24.29%
Return on Equity (Normalized)
18.94%7.31%33.36%
Return on Invested Capital (Normalized)
10.39%7.01%27.81%
Return on Assets
CFR
UHR
RMS
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