Deutsche Bank sees 13% upside potential in shares of Cartier's owner

Deutsche Bank recommended buying shares of Swiss holding Richemont, which owns Cartier, Van Cleef & Arpels, Montblanc and other luxury Marks, and raised the target price of the company's securities from 180 to 195 Swiss francs (about $224 to $243). The bank also updated its forecasts for other companies in the luxury sector. Analysts expect the industry's growth to become more even in 2026, and the gap between leaders and outsiders to narrow considerably.

Deutsche Bank improved its recommendation on shares of Swiss holding Compagnie Financière Richemont SA from "hold" to "buy". And the target price of Richemont securities, analysts expect, during 2026 will increase by 13% from current levels of 173 Swiss francs (about $215), to 195 Swiss francs (about $243). The estimates are presented in the Luxury Outlook 2026 report, Investing.com writes .

The bank also adjusted target levels for other companies in the sector: while maintaining a "buy" recommendation on Hermes International SCA, it reduced the target price for the company's securities - from €2420 to €2400 (+13% to the current value). And LVMH Moët Hennessy Louis Vuitton SE securities, according to experts' estimates, will show more growth in 2026: the target price of the shares was raised from €635 to €715 (+12% to the current price); the "buy" recommendation is maintained.

Deutsche Bank analysts believe that growth in the luxury industry will become more even in 2026, with the gap between the most and least successful companies narrowing to around 5 percentage points, whereas in recent years the differences have been much more pronounced.

The bank notes that luxury brands are "generally well-positioned to accelerate growth in 2026," although expecting a return to pre-crash rates in the medium term is still a long shot.

LVMH and Burberry remain in the list of the most attractive securities of Deutsche Bank. The experts also added Richemont to them - due to stronger-than-forecast sales dynamics. Among the least preferred remain Kering and Moncler - due to inflated growth expectations and increased risks to earnings in 2026.

The luxury goods market should resume growth in 2026, with sales of premium goods likely to rise 3-5%, analysts at consulting firm Bain & Co. expect, Bloomberg wrote in late November.

Bain managing partner Claudia D'Arpizzio noted that in 2025 the market, according to current forecasts, will hardly show a noticeable rise. And this is already an improvement in expectations: back in the summer, analysts allowed demand to fall by about 5%

According to D'Arpizzio, brands themselves have partly provoked a cooling of the market by raising prices too sharply in an attempt to emphasize exclusivity. However, for major players like LVMH, Richemont and Burberry, the situation has started to gradually improve - a sign that the industry may be approaching a new cycle of growth.

"Now luxury houses are going through a reboot period: they are trying to be more creative, inviting new designers," the expert said . - At the same time, brands are adjusting their pricing strategy and releasing more affordable entry-level models.

This article was AI-translated and verified by a human editor