Watches of Switzerland (LON: WOSG) share price has made a strong recovery on Tuesday after the company published encouraging financial results. The stock jumped by as much as 15%, the best daily increase in months. It remains about 65% below the highest point in 2022.
Stable growth in the US and UK.Watches of Switzerland published encouraging financial results on Tuesday. The company, which sells watches in the UK, US, and other countries, said that its revenue rose by 5% in the second quarter. It reached a high of £379 million.
Its revenue in the United States rose by 11% to £165 million while UK and Europe rose to £214 million. For the half year, the company’s revenue rose to £761 million. It believes that the total revenue will be between £1.65 billion and £1.7 billion. In a statement, the company’s CEO said:
“In the second half, our major showroom upgrades in the UK will reopen pre-Christmas along with the reopening of our US Rolex boutique at Millenia, Orlando. That, combined with our sequential sales improvement over the quarter means we reiterate our FY24 guidance.”
As I have written before, Watches of Switzerland is one of the best retail stocks to invest in in the UK. For one, the company has a strong market share in an industry that is doing modestly well.
This trend is evidenced by the company’s strong growth and market share even as competition rises. One of the top competitors are Bucherer, which was recently acquired by Rolex, sending shockwaves in the UK.
At the time, investors worried that the acquisition would be a major issue for Watches of Switzerland, which is a big seller of Rolex watches. As I wrote at the time, these fears were unfounded.
WOSG also has a good market share in both used and new watches market. Most importantly, it is growing at a faster pace in the United States, which is a big market. The company will also benefit if interest rates start falling in 2024.
Watches of Switzerland share price forecast
The daily chart shows that the WOSG stock price has been in a strong downtrend in the past few months. This sell-off accelerated after Rolex acquired Bucherer. The chart also shows that the stock has formed a bearish channel, which is shown in yellow. This channel connects the highest and lowest swings since January.
The stock has now moved slightly above the 50-day and 25-day Exponential Moving Averages (EMA). It remains below the important resistance level at 628.5p, the lowest swing in September.
Watches of Switzerland stock’s volume has been in a downtrend. Therefore, there is a likelihood that the shares will likely continue rising as buyers target the resistance point at 630p. A move above that level will see it continue rising as buyers target the psychological level at 700p.
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