September 19, 2024
Top 10 Stock Richemont Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Richemont – Top 10 Stock in SDG 17: Partnerships to achieve the Goal
Richemont is listed as a top 10 stock on September 19, 2024 in the market index SDG 17 because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 68 (high 68% performer), Obermatt assesses an overall buy recommendation for Richemont on September 19, 2024.
Snapshot: Obermatt Ranks
| Country | Switzerland |
| Industry | Apparel, Accessories, Luxury |
| Index | Dividends Europe, Human Rights, Renewables Users, SDG 12, SDG 13, SDG 17, SDG 5, SDG 8, SPI, SMI |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Richemont Buy
| 360 METRICS | September 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 31 |
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| GROWTH | ||||||||
| GROWTH | 53 |
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| SAFETY | ||||||||
| SAFETY | 82 |
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| SENTIMENT | ||||||||
| SENTIMENT | 61 |
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| 360° VIEW | ||||||||
| 360° VIEW | 68 |
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ANALYSIS: With an Obermatt 360° View of 68 (better than 68% compared with alternatives), overall professional sentiment and financial characteristics for the stock Richemont are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Richemont. The consolidated Growth Rank has a good rank of 53, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 53% of competitors in the same industry. The consolidated Safety Rank at 82 means that the company has a financing structure that is safer than 82% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 61, which means that professional investors are more optimistic about the stock than for 61% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 31, meaning that the share price of Richemont is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 69% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 68, Richemont is better positioned than 68% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 53), a safe financing structure (Safety Rank of 82), and positive professional market sentiment (Sentiment Rank of 61), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Richemont compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (53% better than peers). The value rank could be the reverse reflection of that (47%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Richemont positive
ANALYSIS: With an Obermatt Sentiment Rank of 61 (better than 61% compared with alternatives), overall professional sentiment and engagement for the stock Richemont is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Richemont. Analyst Opinions are at a rank of 47 (worse than 53% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 22, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 57, which means that professional investors hold more stock in this company than in 57% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 76, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 76% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Richemont and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 61 (more positive than 61% compared with investment alternatives), Richemont has a reputation among professional investors that is above-average compared with that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Richemont Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 31 (worse than 69% compared with alternatives), Richemont shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Richemont. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 67% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 13 which means that the stock price compared with what market professionals expect for future profits is higher than 87% of comparable companies, indicating a low value concerning Richemont's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 31 which means that the stock price compared with what market professionals expect for future profit levels is higher than 69% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 28 is also low. Compared with invested capital, the stock price is higher than for 72% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a hold recommendation based on Richemont's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Richemont? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Richemont only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Richemont Growth Momentum good
| GROWTH METRICS | September 19, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 42 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 35 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 59 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 61 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 53 |
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ANALYSIS: With an Obermatt Growth Rank of 53 (better than 53% compared with alternatives), Richemont shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Richemont. Capital Growth has a rank of 59, which means that currently professionals expect the company to grow its invested capital more than 35% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 61 (above 61% of alternative investments). But Sales Growth has only a rank of 42, which means that, currently, professionals expect the company to grow less than 58% of its competitors, and Profit Growth is also low at a rank of 35. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 53, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Richemont, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Richemont Debt Financing Safety very solid
| SAFETY METRICS | September 19, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 46 |
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| REFINANCING | ||||||||
| REFINANCING | 55 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 88 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 82 |
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ANALYSIS: With an Obermatt Safety Rank of 82 (better than 82% compared with alternatives) for 2024, the company Richemont has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Richemont is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Richemont. Refinancing is at 55, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 55% of its competitors. Liquidity is also good at 88, meaning the company generates more profit to service its debt than 88% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 46, which means the company has an above-average debt-to-equity ratio. It has more debt than 54% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 82 (better than 82% compared with alternatives), Richemont has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Richemont could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Richemont Above-Average Financial Performance
| COMBINED PERFORMANCE | September 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 31 |
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| GROWTH | ||||||||
| GROWTH | 53 |
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| SAFETY | ||||||||
| SAFETY | 88 |
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| COMBINED | ||||||||
| COMBINED | 68 |
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ANALYSIS: With an Obermatt Combined Rank of 68 (better than 68% compared with investment alternatives), Richemont (Apparel, Accessories, Luxury, Switzerland) shares have above-average financial characteristics compared with similar stocks. Shares of Richemont are low in value (priced high) with a consolidated Value Rank of 31 (worse than 69% of alternatives). But they show above-average growth (Growth Rank of 53) and are safely financed (Safety Rank of 82, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 68, is a buy recommendation based on Richemont's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Richemont exhibits low value (Obermatt Value Rank of 31), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 53). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 82) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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