2024-04-01 00:27:31 ET
Summary
- LVMH with its wide portfolio, full of heritage brands became 2nd most valuable European company, of superior quality.
- The company is well resilient to economic cycles due to customer loyalty, exclusivity, and pricing power.
- After a couple of years of 20%+ sales growth, the luxury goods industry growth is normalizing and we need to adjust our expectations.
- LVMH has witnessed a quick stock price recovery from its January low and at a blended P/E of 27.1x its earnings, it's time to exercise caution.
- With a 20% return since my last coverage in a span of 4 months, I am downgrading the stock to "Hold".
What does generally come to your mind first, when people mention luxury goods?
I would expect people to think about beach front villas, yachts, sport cars, but certainly fashion, watches and expensive cosmetics make the top of the list.
Moët Hennessy Louis Vuitton ( LVMHF ) , Hermès International S.A. ( HESAY ) and Estée Lauder Companies ( EL ) are all companies which generally represent the luxury segment, but not all of these companies are created equal....
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For further details see:
LVMH: Reality Check For The Epitome Of Luxury (Rating Downgrade)