Movado Group: Keeping Good Time
This maker of high-end watches should benefit from a growing market for luxury goods -- and its stock looks priced to buy, says S&P.
Movado Group appeals to shoppers' taste for high-end watches -- and the luxury lifestyle those timepieces represent. The company is expected to generate double-digit percentage sales growth this year, benefiting from the willingness of consumers to pay up for luxury goods -- such as watches priced in the thousands of dollars. But investors don't have to pay through the nose to invest in Movado. In fact, Standard Poor's analyst Jason Asaeda says the stock looks like a bargain.
The Paramus, N.J., company is well positioned in the global luxury goods market. Its brands cover a wide price range, from the ultra-expensive Ebel and Concord names to its entry-level Swiss brand, ESQ. Movado plans to spend heavily on new products and marketing this year. And it aims to build on the reputation of the Movado brand through its namesake boutiques, which sell jewelry as well as watches.
In addition to the brands the company owns outright, Movado has licensing partnerships to sell watches under various premium, high-growth fashion brands, including Coach, Tommy Hilfiger and Hugo Boss. It's planning to launch a new collection of Hugo Boss watches in March, and it's developing a high-end Juicy Couture collection.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The company is also expanding in foreign markets, such as China, Japan and Europe. SP says that continued expansion in selected markets should offer some protection should spending weaken among U.S. consumers.
Only a handful of brokerage analysts cover the stock (symbol MOV). SP gives Movado its highest, five-star ranking and added the stock to its "top ten" portfolio on Wednesday. The share price, which has more than doubled since January 2003, jumped 5% on Wednesday, to $21. At that price, the stock sells for 15 times SP's earnings estimate of $1.43 per share for the fiscal year that ends January 2007. SP's 12-month price target is $24.
--Lisa Dixon
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
-
Stock Market Today: Stocks Soar on Apple Buyback News, Jobs Data
The main indexes rallied hard to end the week thanks to Apple's $110 billion stock repurchase plan and a big April payrolls miss.
By Karee Venema Published
-
Three 'Hidden Costs' of Health Savings Accounts (HSAs)
Health Savings HSAs offer valuable tax benefits, but can 'hidden costs' erode those advantages?
By Kelley R. Taylor Last updated
-
Stock Market Today: Stocks Soar on Apple Buyback News, Jobs Data
The main indexes rallied hard to end the week thanks to Apple's $110 billion stock repurchase plan and a big April payrolls miss.
By Karee Venema Published
-
Stock Market Today: Stocks Sizzle Ahead of Apple Earnings, Jobs Report
The Nasdaq outperformed in a strong day for stocks thanks to Qualcomm's post-earnings pop.
By Karee Venema Published
-
Stock Market Today: Stocks Pop Then Drop After Fed Meeting
Stocks went on a roller-coaster ride after Fed Chair Powell said interest rates were likely at a sufficiently restrictive level.
By Karee Venema Published
-
Fed Holds Rates Steady at 23-Year High: What the Experts Are Saying
Federal Reserve The Federal Reserve struck a dovish pose even as it kept interest rates unchanged for a sixth straight meeting.
By Dan Burrows Published
-
Stock Market Today: Stocks Sell Off Ahead of Fed Decision
Stocks sold off sharply Tuesday as anxiety set in ahead of Wednesday's policy statement from the Federal Reserve.
By Karee Venema Published
-
Stock Market Today: Markets Post Broad-Based Gains Thanks to Mega-Cap Tech
Stocks get help from a couple of laggard Magnificent 7 stocks.
By Dan Burrows Published
-
Stock Market Today: Markets Soar Amid Strong Earnings for Big Tech
Equities ended the week on an up note thanks to some of the market's biggest names.
By Dan Burrows Published
-
Stock Market Today: Markets Tumble Amid Slower Economic Growth and Rising Prices
Disappointing readings on GDP and inflation helped tank equities.
By Dan Burrows Published