LIVE MARKETS — Luxury's long game
(Adds blog post) STOXX 600 up 0.6% AI jitters, earnings in focus LVMH disappoints Wal St futures mixed Broadcom CEO says AI investing like "casino gambling" Welcome to the home for real-time coverage of markets brought to you reporters. You can share your thoughts with us at Luxury's Long Game The latest disappointment from LVMH has confirmed that investors will have to wait longer for a recovery. Yet after a bruising de-rating, undemanding valuations are prompting some portfolio managers to ask whether the wait could be worth it. Weak demand in China for flagship brand Louis Vuitton led to a quarterly sales miss in the luxury bellwether's fashion and leather goods division, raising fresh doubts that the industry will emerge from the slowdown anytime soon. Barclays now sees the group's sales growth settling closer to 4% a year until 2030, down from 5% before, cutting earnings forecasts and its price target. Yet the bank still sees 22% upside to its new target, arguing that its assumption of a 19 times multiple on 2027 earnings is "reasonable" for a consumer company capable of delivering that level of growth. That valuation argument is attracting attention. Vontobel Asset
6% AI jitters, earnings in focus LVMH disappoints Wal St futures mixed Broadcom CEO says AI investing like "casino gambling" Welcome to the home for real-time coverage of markets brought to you reporters. You can share your thoughts with us at Luxury's Long Game The latest disappointment from LVMH has confirmed that investors will have to wait longer for a recovery. Yet after a bruising de-rating, undemanding valuations are prompting some portfolio managers to ask whether the wait could be worth it.
Weak demand in China for flagship brand Louis Vuitton led to a quarterly sales miss in the luxury bellwether's fashion and leather goods division, raising fresh doubts that the industry will emerge from the slowdown anytime soon. Barclays now sees the group's sales growth settling closer to 4% a year until 2030, down from 5% before, cutting earnings forecasts and its price target. Yet the bank still sees 22% upside to its new target, arguing that its assumption of a 19 times multiple on 2027 earnings is "reasonable" for a consumer company capable of delivering that level of growth. That valuation argument is attracting attention.
Vontobel Asset Management senior investment strategist Mario Montagnani said investors should focus on what lies beyond the current downturn. "These companies are here to stay for decades, not the next 10 months. And when I look at their cash generation, I think we've probably already hit bottom," he said, adding that multiples now looked attractive for investors with a horizon beyond 12 months. Montagnani said it could take another couple of quarters before the sector finds a catalyst, with China's consumer still weak.
But he expects 2027 could mark an inflection point. " (Danilo Masoni) *** Earlier On Live Markets: Ai Jitters, But The Stoxx Still Rises Click Here Europe Before The Bell: Steady-ish Click Here The Fragile Ai Trade Click Here