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

Today we're going to take a look at the well-established The Swatch Group AG (VTX:UHR). The company's stock received a lot of attention from a substantial price increase on the SWX over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Swatch Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out the opportunities and risks within the XX Luxury industry.

What's The Opportunity In Swatch Group?

According to my valuation model, Swatch Group seems to be fairly priced at around 16.68% above my intrinsic value, which means if you buy Swatch Group today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is CHF224.21, then there isn’t really any 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.

What kind of growth will Swatch Group generate?

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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Swatch Group's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in UHR’s positive outlook, 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 tabs 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Swatch Group.

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.