Bernstein Updates Price Target, Estimates for Swatch Group After H1 Results

07:45 AM EDT, 07/22/2026 (MT Newswires) -- Bernstein revised its price target and earnings projections for Swatch Group (UHR.SW, UHRN.SW), as the research firm took note of the Swiss watchmaker's first-half investor conference call. "Swatch Group continues to point to improving near-term trends, driven by strong global demand for Swiss-made mechanical watches. Management suggests that top-line momentum in July and August may remain on-trend with May and June's strong performance. This will hopefully drive positive operating leverage and higher operating profits in 2H26," according to a Tuesday note. The research firm cautioned that Swatch Group's historical record showed that robust top-line growth "may not necessarily" translate to strong operating leverage. Bernstein noted that the sales acceleration in May and June stemmed from a temporary lift provided by the launch of the Swatch x AP Royal Pop collaboration. Within this context, analysts trimmed the market-perform-rated stock's price target to 195 francs from 200 francs and lowered their full-year 2026 EPS forecast by 2%, accounting for Royal Pop sales and anticipated 300 million francs in production costs. "Swatch Group's share price has been buoyed by excitement around product and market activations, and signs of a gradual recovery in Chinese Swiss watch demand. Recent successes, however, risk reinforcing management's conviction that Swatch Group's decision to maintain significant production capacity in order to play on a resurrection of the entry price watch segment is the right one. Without ad hoc collaborations with high-end brands, which cannot be repeated ad infinitum, we believe these profit boosts are likely to be transient (if they appear at all), leaving overcapacity a structural drawback for [return on invested capital] performance," the note said.