LVMH makes its shareholders happy. On the Paris Stock Exchange, the main heavyweight of the CAC 40 (worth €391 billion!) saw its shares up more than 13% in the Friday 26th January session alone, at the time of writing. It must be said that the day before, after the session, the French luxury giant led by billionaire Bernard Arnault (who saw his fortune grow by more than $18 billion in a single day this Friday) largely calmed down his accounts. The 2023 event, despite the strong headwind.
LVMH, in fact, achieved the feat of achieving profits of 15.2 billion euros (+8%) last year, achieving an impressive turnover of 86.2 billion euros (+9%). Flagship brands Louis Vuitton had an “excellent performance” and Christian Dior an “outstanding performance”, while Sephora had an “exceptional” year, LVMH was delighted. EToro noted that eToro results were “very strong” across all segments. And this, despite the trend towards normalization of sales of luxury items in Europe after the prosperous post-Covid years and the significant difficulties of the Chinese economy (a key market for the luxury sector, with Chinese customers representing an average of 20-30%). invoicing CAC 40 luxury giants).
LVMH: Has the CAC 40 luxury leader reached a low point in the stock market after shareholders failed?
LVMH, No. 1 in the CAC 40, weathered the anxiety-inducing 2023 better than expected.
In the fourth quarter of 2023, LVMH’s operating income and profit “increased by 8%, while the margin rate remained stable at 26%”, points out eToro, and despite weakening growth in Europe, while growth in Europe accelerated in the States In the United States and the Asian region. In addition to the strong resilience of the North American market, Alphavalue for its part says that LVMH’s momentum in Japan has continued. Despite a global economy marked by multiple key rate hikes by central banks in 2023, China’s real estate crisis and major geopolitical tensions, LVMH did better than cope. The luxury giant controlled its costs (particularly marketing costs) better than expected and had a strong year-end, UBS says. Request for luxury items LVMH and its profitability has held up well at the end of 2023, added Citi.
LVMH management is enthusiastic about 2024…
As for the outlook, LVMH says it is cautious, but has shown confidence, which has also helped reassure shareholders. The luxury giant is counting on a unique and inspiring event in 2024, hoping to capitalize on its partnership with the Paris Olympics and aiming to gain market share. LVMH aims to maintain margin rates in 2024 thanks to cost control measures, Stifel stressed. CEO Bernard Arnault reported that the ultra-premium market was the fastest growing segment globally. So much so that Christian Dior haute couture has to “restrict orders”!
… but financial analysts are more divided on LVMH’s outlook
Slightly more cautious than LVMH’s management for 2024, JPMorgan has warned of the risk of volatility in the luxury giant’s growth in the fashion and leather goods division (the arm that includes the Louis Vuitton brand) and wine and spirits. UBS, for its part, believes that visibility is relatively poor and that the potential to increase margins is limited, at least in the short term. LVMH shares do not offer upside, according to the Swiss bank, whose price target is 760 euros, roughly the current price levels. Oddo BHF also sees only limited valuation potential, at least with its price target of just €808, although the broker says it appreciates LVMH’s strong brands as well as its focus and precision.
Stock market: CAC 40, LVMH, Société Générale, Safran… this week in the Momentum program
As LVMH shares soar in the stock market, is it time to jump on the bandwagon?
Readers of Momentum, Capital’s daily premium investment newsletter in the stock market, were able to make huge profits. LVMH stock (as well as Hermès) these last years After our analysis, they were able to sell LVMH shares near the 2023 high, only to buy them back a few quarters later at significantly lower price levels. Find out soon about our updated scenario on the potential of LVMH shares in Momentum. And find our forecasts on the CAC 40 and stocks every day. To join our investor community, click the link below.
>> Buy and sell your shares in the stock market at the right time thanks to Momentum, Capital’s premium investment letter based on technical, economic and financial analysis. Take advantage of a free (and no-obligation) one-month trial right now with promo code CAPITAL30J.