Watches of Switzerland (LON: WOSG) share price continued drifting downwards ahead of its financial results scheduled for Wednesday. The stock plunged by more than 3% on Tuesday, the lowest point since April 21st. In all, the shares have dropped by more than 53% from the highest point in 2022.

Watches of Switzerland earnings ahead

Watches of Switzerland is a leading retailer of used and brand-new luxury watches from some of the best-known brands in the world. Some of the best-known brands it sells are Rolex, Patek Philippe, Cartier, Tag Heuer, and Breitling among others.

Watches of Switzerland sells its products in its website and retail store. The company has a substantial market share in the UK and other countries. Most importantly, Watches of Switzerland operates in the luxury goods industry that has proven to be quite resilient during the cost of living crisis.

The most recent results shows that Watches of Switzerland’s revenue jumped by 17% to £407 million in its third quarter. In the nine months, the company’s revenue soared by 25% to over £1.17 billion. This growth was helped by luxury watches where demand has been relatively stable. 

The company believes that the company’s revenue will jump to between £1.5 billion and £1.55 billion. Its EBIT is expected to come in between £178 million and £190 million.

A likely catalyst for the company is the ongoing rumours of a takeover. A recent note by Betavelle noted that some private equity companies were circling the company. Analysts believe that the company makes a good investment because of its cheap valuation and strong market share in an industry that is growing.

The company could also be attractive to one of the biggest luxury groups in the world like Hermes, LVMH, Kering, and Richemont.

Watches of Switzerland share price forecast

Turning to the daily chart, we see that the WOSG stock price formed a double-top pattern at 1,043p. In price action analysis, this is usually a bearish sign. Now, it has moved below the key support at 782p, the lowest level on December 2022.

The shares have moved below the 25-day and 50-day exponential moving averages (EMA). Therefore, the shares will likely have a bearish breakout as sellers target the key support at 630p, the lowest point in September. In the long-term, however, the shares will likely bounce back amid speculation rumours.

The post Watches of Switzerland share price forecast ahead of earnings appeared first on Invezz.

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