Plenty of growth stocks have had a good 2024. ( ) and ( ) aren’t among them. Year-to-date, their share prices have tumbled 50% and 41% respectively.
But is there a case for saying they’re now oversold? Here’s my take. Troubled sector Times have clearly been tough for anything faintly related to the luxury sector. High inflation and the subsequent cost-of-living crisis have hit earnings at both companies.
Last month, Watches of Switzerland’s reported a 40% drop in its annual pre-tax profit to £92m. Earlier this month, Burberry reported a 21% fall in Q1 underlying sales and now anticipates posting an operating loss over the first half of its financial year. In anticipation of this, were shelved.
Oh, and it pushed its CEO out of the door. As an exercise in ‘kitchen-sinking’ bad news, it was almost impressive. Green shoots? There’s certainly an argument for thinking that at least one of these stocks might be in bargain territory.
A of under 10 for the timepiece retailer looks attractive. This is assuming that the company was right to be “ ” on the trading outlook in June. It also believed that the industry was being “ ” which could make this niche market more stable over the long term.
Burberry’s forward P/E stands at 17, according to my data provider. That’s only slightly below it’s five-year average P/E of 20, although it’s based on a near halving of earnings per share in 2024. A 32% recovery in FY26 brings the P/E down to a more palatable 13.
Fee.