Richemont Shares Surge Following Major Analyst Upgrade

Compagnie Financière Richemont's stock experienced a substantial confidence boost after HSBC issued a significant rating upgrade. The investment bank shifted its recommendation from "Hold" to "Buy" while raising its price target substantially from 155 to 190 Swiss francs. Market response was immediate, with shares climbing 1.95% to close at 161.80 francs yesterday, making it the second-best performer within the Swiss benchmark index.

The luxury conglomerate's impressive trajectory is primarily fueled by its outstanding jewelry division performance. Prestigious houses including Cartier, Van Cleef & Arpels, and Buccellati continue to demonstrate remarkable strength within the luxury sector. HSBC analysts described this sustained momentum as "impressive" and anticipate continued expansion. Notably, the jewelry unit's revenue growth has now exceeded that of LVMH's fashion and leather goods division for six consecutive quarters—a pattern expected to persist.

Revised Financial Projections Support Bullish Outlook

HSBC's updated financial forecasts present a compelling growth narrative:

Should investors sell immediately? Or is it worth buying Compagnie Financiere Richemont?

• Revenue Expansion: Projected to increase from €21.4 billion (2025) to €25.5 billion (2028)
• EBIT Growth: Expected to climb from €4.47 billion to €5.82 billion
• Net Profit Forecast: Anticipated to reach €4.67 billion by 2028
• Margin Progression: Solid margins forecast at 20.2% (2026), 21.5% (2027), and 22.9% (2028)

The financial institution also raised its EBIT estimates for 2026 through 2028 by 3%, 4%, and 5% respectively. Additionally, HSBC revised its Asia growth projection upward from -1% to +6% following China's market recovery.

Sustained Momentum Ahead?

Market observers are now questioning whether this upward trajectory can maintain its pace. The stability of Richemont's leadership team under CEO Nicolas Bos is considered a crucial advantage. The upcoming interim results, scheduled for release on November 14, could serve as the next significant catalyst for the stock.

Trading activity underscores substantial investor interest, with yesterday's volume reaching 603,000 shares valued at 97.55 million francs. Throughout the session, shares fluctuated between 160.20 and 162.80 francs, indicating bullish investors currently maintain control of market sentiment.