Richemont’s Jewelry Strength Pushed Bernstein To Lift Forecasts

Richemont’s Jewelry Strength Pushed Bernstein To Lift Forecasts – Finimize

Richemont beat expectations in its fiscal first quarter, and Bernstein, an analyst firm, lifted its price target on the luxury group’s shares to 240 Swiss francs from 200 after especially strong jewelry results.

Bernstein said Richemont’s Jewelry Maisons – brands like Cartier and Van Cleef & Arpels – grew 24% in constant currency, about 11 percentage points ahead of the market’s consensus forecast. The strength looked broad-based across regions and sales channels, and it came more from selling more higher-end pieces than from simply raising prices, with pricing “broadly stable” from the prior quarter. That’s important because investors had been watching for jewelry’s lead over the group’s softer fashion and leather business to shrink; instead, the gap stayed wide. With jewelry now posting double-digit growth for seven straight quarters, Bernstein concluded demand looks more durable than feared and raised its fiscal 2027 and 2028 earnings-per-share estimates by 17% and 21%.

For markets: Bernstein’s 240-franc target rose less than its 21% fiscal 2028 EPS upgrade.

When analysts lift earnings forecasts faster than they lift a price target, it usually means they’re relying more on higher profits and less on a “rerating” – investors paying a higher price for each dollar of earnings. Here, the target price rose 20% (200 to 240 francs), while Bernstein lifted earnings-per-share estimates 17% for fiscal 2027 and 21% for fiscal 2028. That math implies a slightly lower forward price-to-earnings multiple than before, even with a higher target in absolute terms. So the debate for Richemont shifts: less about whether jewelry demand is real, and more about how much valuation upside is left if profits do the heavy lifting.