The Swatch Group Valuation report (Dissertation)

Abstract

This is a comprehensive valuation report on the Swatch Group Ltd. A predominant company in the watchmaking and jewelry industry that specializes in luxury and mid-range watches, the Swiss company has been in business since 1983 and has a presence worldwide. In this report the company will be evaluated for an investment decision on whether to buy or sell depending on the value of the stock in the next five years, through the forecasted value of the company, this value will be calculated using valuation techniques that use financial reporting available to investors. For evaluating the swatch group and after researching the company and exploring its historical financial data, the use of the discounted cash flow (DCF) model is chosen to evaluate the present value of the company which gives us an insight into weather the company can generate profits for an investment or not, the investment decision on whether to buy or sell the company will be supported by the DCF model, a sensitivity analysis which gives us more alternate scenarios on the present value of the company based on the cost of capital and the growth rate, the relative valuation of the company which compares certain ratios with other similar companies of similar financial metrics and work in the same industry. Right now, the group is publicly traded on the Swiss stock exchange at a share price of 235.40 Swiss francs (CHF) as of September 29, 2023, and evaluating the company gives us a share price of 259.62 CHF with a 10% premium to the current share price, with that the recommendation is to buy the shares or add more shares to an existing portfolio.