UBS backs South African billionaire Johann Rupert’s Richemont

UBS has reaffirmed its buy rating on Richemont with a price target of CHF 188.76, implying about 11% upside from where the shares closed.

Zuzanna Pusz set it after the bank’s luxury conference in Milan on Thursday, writing that confidence in the jewellery business ran through most of the conversations she had there.

Jewellery is the whole argument. Richemont owns Cartier and Van Cleef & Arpels, and those two houses have carried the group through a period in which watches and leather goods have struggled across the sector. While LVMH’s revenue fell and Bernard Arnault dropped out of the world’s top ten richest, Richemont has been posting growth.

The target has moved around considerably this year. UBS cut it to CHF 182 from CHF 205 in March, held it there through May, lifted it to CHF 186 in late May after full-year results confirmed the group as one of the industry’s most attractive long-term growth stories, and took it to CHF 213 in July when first-quarter sales beat even the most optimistic forecasts.

The current CHF 188.76 sits well below that July peak.

Richemont is the source of Johann Rupert’s fortune. He is executive chairman and controls the company through a dual-share structure that gives him 51% of the voting rights while holding a much smaller economic stake, which is the same mechanism his family uses at Remgro through unlisted B shares.

He is South Africa’s wealthiest person.

Twenty-six analysts cover the stock, with a mean consensus of outperform and an average target above CHF 198.