Berenberg Reiterates Swatch Group's Sell Rating After H1 Report

06:59 AM EDT, 07/22/2026 (MT Newswires) -- Berenberg maintained The Swatch Group (UHR.SW, UHRN.SW) at sell, with an unchanged price target of 130 francs, as analysts took note of the company's "missing operating leverage" in its first-half report. For the six months ended June 30, the Swiss watchmaker reported an operating result of 52 million francs, down from 68 million francs a year ago and below consensus estimates of 126 million francs. On the flip side, net sales came in at 3.12 billion francs, up 8.5% year over year at constant currency and 5.4% above the consensus forecast of 3.06 billion francs. "Management attributed the weakness to production underutilisation, Winter Olympics-related costs and higher energy prices, but continues to target 9-10% EBIT margins by year end if the sales recovery persists. While Swatch's EBIT margins have matched Richemont's [CFR.SW, CFR.JO] specialist watchmaker division over the last decade, we remain cautious as stronger sales have yet to generate meaningful operating leverage and repeated self-help efforts have not produced a sustained recovery in profitability," analysts said. On the earnings forecast front, Berenberg raised its sales, EBIT, and EPS projections from 2026 to 2028, though analysts said the figures remain below consensus. "We increase our forecasts to reflect positive current trading, lifting sales by 1.8% across the forecast period, consistent with our more bullish US consumer and bearish Chinese consumer mid-term view," the research firm added.