Why The Swatch Group AG (VTX:UHR) Could Be Worth Watching

Let's talk about the popular The Swatch Group AG (VTX:UHR). The company's shares saw a decent share price growth in the teens level on the SWX over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Swatch Group’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Swatch Group

What's The Opportunity In Swatch Group?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 18% below my intrinsic value, which means if you buy Swatch Group today, you’d be paying a fair price for it. And if you believe that the stock is really worth CHF303.86, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Swatch Group’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Swatch Group?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Swatch Group's earnings over the next few years are expected to increase by 20%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? UHR’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on UHR, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Swatch Group as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Swatch Group has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Swatch Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.