Goldman ups Watches of Switzerland to 'buy', shares surge

Watches of Switzerland surged on Wednesday after Goldman Sachs upgraded the shares to ‘buy’ from ‘neutral’.

GS noted the share price has fallen by 40% year-to-date, underperforming the luxury sector by 11% and the general retail sector by 2%.

"We expect Watches of Switzerland to have a relatively more resilient sales profile than peers, due to its high exposure to waitlisted products, which is underestimated by the market, in our view," it said.

"We look for a 16% revenue compound annual growth rate in FY22-26E. With 55% upside to our new 1,330p 12-month price target (up circa 5% from 1,265p), we see the risk-reward profile as attractive and upgrade the stock."

At 1600 BST, the shares were up 7.8% at 924p.