Watches of Switzerland Group PLC (LSE:WOSG) was upgraded by Deutsche Bank to 'buy' from 'hold' as it sees the risk to earnings from US import tariffs as being more contained than the market was pricing in.
"This is based," said analyst Alison Lygo, "on our view that where the real risk sits, demand for non supply constrained brands in the US, is a much smaller part of the gross profit pool than is perhaps appreciated."
WSOG's exposure to non-supply constrained brands in the US is only around 12% of group gross profit this year.
Even in a sharper downside case where tariffs lead to 15% higher prices and 30% lower volumes in FY27, shares would still trade on about 9x earnings, compared with the 11x multiple underpinning Deutsche's target.
The bank kept its price target unchanged at 450p, versus the shares' last closing price of 318.8p.