Richemont's Growth Remains Solid Despite Lockdowns in China; Shares Attractive

We are maintaining our fair value estimate of CHF 123 per share for wide-moat Richemont as the company reported solid growth in first-quarter sales despite lockdowns in China. Richemont is our preferred company in the luxury segment at the moment, trading in 4-star territory, at a 20% discount to our fair value estimate. We specifically like Richemont’s jewellery brands, Cartier and Van Cleef & Arpels (86% of EBIT), which are the most profitable and fastest-growing brands in the luxury jewellery industry, with very high entry barriers and strong growth prospects. Its watchmaking businesses are improving and the balance sheet is very strong with EUR 5.4 billion in net cash, allowing it to invest countercyclically.