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Investing.com - Kepler Cheuvreux downgraded Watches of Switzerland (LON:WOSG) from Buy to Hold and lowered its price target to GBP3.50 from GBP4.75 on Wednesday.
The downgrade comes in response to uncertainty created by the United States’ 39% tariff on products imported from Switzerland, according to the research firm’s sector report.
The US market accounts for almost half of Watches of Switzerland’s group sales, with the majority being Swiss-made timepieces, making the company particularly vulnerable to the tariff impact.
Kepler Cheuvreux expects margin pressure as watch brands reduce distributors’ margins and sales weaken for non-supply-constrained brands due to US buyers potentially shopping abroad to avoid higher prices.
While acknowledging the stock is not expensive, the research firm anticipates a period of estimate cuts as their projections move below both consensus expectations and company guidance.
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