LVMH Stock: Luxury Gem on Sale

Last Updated: 20. Dezember 2023By

The luxury sector is suffering from weak demand, particularly from China. Like the entire industry, LVMH has had to contend with turbulence this year. Consequently, operations are not running smoothly for the luxury goods conglomerate. Is this now a reason to turn away from LVMH? Not really.

Analysts remain convinced of the good prospects of the French Analysts remain convinced of the good prospects of the French due to their strong market position and large brand power. LVMH is better able to cope with the current challenges than the competition and is likely to benefit significantly when demand picks up. The luxury goods company has recently significantly expanded its position as Europe’s largest fashion brand conglomerate. LVMH was able to increase its revenues in this area by around €16.4 billion, 74 percent, from 2019 to 2022. In April of this year, the luxury goods company was the first publicly listed European company to exceed the $500 billion market capitalization.

The luxury goods industry will continue to develop strongly According to a study by the consultancy Bain & Company, the global market for personal luxury goods such as high-quality clothing, shoes, leather goods, jewelry and perfume grew by 22% to €353 billion last year. Market researchers expect annual growth rates of 3 to 8 percent for the “personal luxury goods” sector depending on how the world economy develops. By 2030, the market would be around 60 percent larger than today at €540 to €580 billion. The growth of the luxury market is to come mainly from emerging countries. India’s luxury goods market, for example, is expected to be 3.5 times larger by 2030 than it is today.

LVMH in the weekly chart – ISIN: FR0000121014


Rating and technical view Based on the profit estimates, the LVMH share has a price-earnings ratio 2024e of 21.4 and a dividend yield of 2%. The paper of the luxury goods conglomerate has set back this year and is currently undervalued by around 10 percent compared to the fair value turnover of the past 3 years. Chart-wise, the share is trading above the rising 200-week line and is showing strength again after its setback.

Conclusion After its record-breaking run, the LVMH share has significantly discounted. Those who wanted to open a position in this luxury goods paper can now get it at a discount.