Deutsche Bank has downgraded Watches of Switzerland Group PLC (LSE:WOSG) from 'buy' to 'hold', raising its price target slightly from 490p to 510p following a 15% rise in the stock since September.
While the bank maintains that the company remains a best-in-class retailer in the resilient luxury watch category, it highlights concerns over growth visibility and profitability raised by the company’s recent half-year results.
Deutsche continues to see Watches of Switzerland as a strategic partner in the luxury sector, with strong mid-term opportunities, particularly in the United States.
It also downplays concerns about the impact of Rolex’s acquisition of Bucherer on the retailer’s business model.
However, with the stock now trading near Deutche's 12-times calendar year 2025 price-to-earnings target, the bank advises caution.
In afternoon trading, the stock was off 1.7% at 462.8p.