Editor’s Note
This analysis examines the divergent trajectories of major luxury stocks like LVMH, Hermès, and Kering, highlighting why a selective approach is crucial for investors navigating the sector’s recovery.
Will LVMH, Hermès, Kering… the luxury giants of the CAC 40 continue to recover or should investors remain cautious about the sector’s prospects? Selectivity remains key for these stocks, whose situations are particularly contrasting.
LVMH, Hermès, Kering… On the stock market, the CAC 40 luxury giants are taking off, buoyed by an encouraging announcement from the major Swiss competitor Richemont, upgrades in recommendations and price targets from numerous financial analysts, and a slight (temporary?) easing of fears regarding the trade war front promised by Donald Trump. However, Guillaume Law-Yee, a financial analyst at Optigestion, consulted by Capital, argues that listed luxury companies (LVMH, Hermès, Kering, Richemont, Ferrari…) are not all in the same boat. He expresses a degree of caution about the sector’s prospects, which is not yet clearly out of the woods.
On the stock market, LVMH, Hermès, and Kering have surged at the start of this year, notably thanks to the publication of Richemont’s results, which exceeded expectations.
notes the financial analyst, who adds that Chinese consumption is still struggling to take off again and remains in decline. A phenomenon fortunately offset by the good performance of the American market. But it is true that in recent quarters, uncertainties about China have weighed on the stock prices of LVMH, Hermès, and Kering.
It is essential to emphasize that the luxury sector must be analyzed in a segmented manner.
argues Optigestion, for whom the general market enthusiasm following Richemont’s results publication therefore seems to be relative.
The luxury sector underwent a correction on the stock market in 2024, and the market is now trying to reflect a fairer valuation. Optigestion expresses a degree of caution, contrary to other asset managers who believe that the luxury sector has already faced its toughest quarters and could stand out on the stock market if more robust stimulus measures are launched in China, a key market for LVMH, Hermès, and Kering.
On the stock market, the most established companies in the luxury sector, such as Ferrari or Hermès, trade at higher valuation multiples (Hermès is valued at 55 times the profits expected by the financial community for 2025, compared to only 25 times for LVMH, for example).
judges Optigestion, which emphasizes that their business model
This strategic advantage
in order to maintain sustained growth over several years, argues the asset manager.
Conversely, companies with weaker valuations on the stock market do not benefit from the same business model.
denounces the management company. This is why Optigestion says it favors luxury players capable of imposing their pace on the market rather than suffering it, betting on listed companies with the capacity to act strategically to preserve their strong position.
