Winding Up For A Comeback: UBS Eyes Rolex Recovery Cycle

A team of UBS analysts led by Zuzanna Pusz is cautious about the global luxury market, citing deteriorating sentiment among Swiss watchmakers. According to the KOF Swiss Economic Institute, expectations of production plans and sentiment on expected orders have decreased, suggesting a recovery may not occur until 2027. The survey reveals declines in production expectations and order outlooks, supporting the analysts' cautious view. Secondary market prices for timepieces, such as Rolexes, have already fallen sharply in recent years. UBS analysts believe used Rolex prices are unlikely to rebound until the Federal Reserve initiates an interest rate-cutting cycle. Morgan Stanley's Michael Wilson predicts this easing cycle could begin as early as next year, with at least seven rate cuts possible. This shift in monetary policy could provide a supportive backdrop for risk assets, including luxury watches, in the second half of 2025. However, UBS's Zuzanna Pusz emphasizes that the watch segment and broader luxury market remain on shaky ground. Any meaningful recovery is unlikely before 2027, according to Pusz. The current market conditions may be ripe for contrarian investors to begin buying Rolexes at low prices.