Investing.com — Swatch Group (SIX:) stock soared this week on speculation about a possible go-private scenario following CEO Nick Hayek’s comments, according to Bernstein analysts. The main reason is that it has increased.
Hayek said in a recent interview that privatizing Swatch “would be a good thing,” especially given the company’s historically low stock price.
Although he later clarified that no such plans were currently in the works, the mere suggestion that such a move was possible sparked significant investor interest.
His comments reignited a long-standing debate about Swatch’s prospects as a private company, especially given its poor performance in public markets.
Bernstein analysts have previously discussed the rationale for such a move, saying the delisting would allow Swatch’s long-time controlling Hayek family to implement the necessary changes outside of public market pressure. It was suggested that flexibility could be gained.
Mr. Bernstein also noted that Swatch’s stock has underperformed in recent years, with the stock underperforming the broader market, creating an incentive for a potential acquisition at a premium.
As Bernstein analysts noted, Swatch’s potential to go private could unlock value by allowing the company to restructure and refocus without public scrutiny.
Further fueling the rally was Bernstein’s outlook on Swatch’s potential, maintaining an “outperform” rating on the stock at CHF 222, 42% above its recent trading price target.
This goal reflects Swatch’s strong brand equity and untapped growth potential, which may be more effectively realized in a private environment and not tied to the short-term demands of public shareholders. There is.
Additionally, operational efficiencies could be improved, particularly in addressing Swatch’s challenges in the entry-level watch market and bloated inventory, further increasing the likelihood of privatization.
Swatch Group shares were trading 2.2% higher on Friday.
