RBC has just upgraded its rating on Swatch from “underperform” to “in line with the sector.” The reason? The surprise launch of a collaboration between Swatch and Audemars Piguet centered on the Royal Pop watch, announced on Tuesday. This move sends a strong signal about the watchmaker’s positioning. 🎯
🔍 What’s happening?
RBC published a research note on Wednesday confirming this change in recommendation. The Canadian bank believes that the partnership with Audemars Piguet, one of the most prestigious names in luxury watchmaking, could revitalize Swatch’s image in the accessible premium segment.
The Royal Pop combines Audemars Piguet’s design DNA with Swatch’s industrial capacity for large-scale production. This strategy echoes the Swiss group’s past successes with the MoonSwatch (Omega) collaborations launched in 2022.
💡 Why does this matter?
For traders following the Swiss watch sector, this upgrade comes at a key moment. Swatch struggled in 2025 due to slowing Chinese demand and competition from smartwatches. The move toward an accessible premium collaboration could reverse the trend.
Luxury watchmaking remains a barometer of global economic health. When sales pick up, it often signals that the wealth effect is returning among affluent households, both in Europe and Asia. A leading indicator for the luxury sector’s equity markets (LVMH, Kering, Richemont).
📊 Our view
We’re mixed on this. The upgrade from underperform to neutral is an improvement, but it remains a lukewarm recommendation.
RBC isn’t betting on outperformance. They’re simply saying the stock shouldn’t underperform the sector anymore. The Royal Pop may generate buzz, but we’ll have to see the actual sales volumes and, above all, the reaction of the Chinese market, which still accounts for 30% of the group’s sales. If the collaboration takes off like the MoonSwatch, Swatch could deliver a positive surprise in its quarterly results. But be careful: the 2025 comparison base was low. In Europe, the AMF is closely monitoring corporate communications regarding brand partnerships, following several cases of greenwashing and brand washing in the luxury sector in recent years.
We view Swatch as a short-term speculative bet on product buzz. For the French trader, it’s a stock to watch but not a strong conviction until actual sales figures are released.
✅ Key Takeaways
- RBC upgrades Swatch from Underperform to Neutral following the Royal Pop announcement
- Swatch x Audemars Piguet collaboration on an affordable premium watch
- Strategy similar to the MoonSwatch, which was a hit in 2022
- A neutral recommendation means no expected outperformance in the short term
What do you think? Can the strategy of affordable premium collaborations really save Swatch from the rise of smartwatches and the slowdown in China?
🔎 See also
For more insights, check out all our stock analyses on ActuTrading Stocks 📈
Source: RBC, Swatch press release, Audemars Piguet
