Leeson

It may seem as a joke, but I assure you it is not. The German analyst Landesbank Baden Wuerttemberg, better known as LBBW, has worsened its recommendation on LVMH to Hold, a very striking fact for the largest luxury company in the world. LBBW has valued the shares of the French company at €195, which means 15% more than its previous valuation. However, it cuts its recommendation because it considers that the current market price leaves a small margin of increase for the stock, barely 4%. LBBW has worsened its recommendation on LVMH to Hold We say it is a novelty because it is a very isolated fact. The market figures show that since last summer the company has received 57 improvements in estimates vs. only two deteriorations, one in December and this one, compared to the upward revisions of September (23), October (13), November (11) or December (7). In addition, the new recommendation, Hold, is at the worst level for the firm, which has 8 recommendations of Buy, 18 of Overweigh and only 10 Hold, a level that in most cases has the same explanation as for LBBW: The market value is too close to its target prices. Möet The average target price for LVMH stands at €188, which is the same than the real one in the stock market. It is very close to the magical sum of the €100 billion stock market value, an unprecedented milestone in the industry. Only 5 billion separates it from that value. Louis Vuitton luggage manufacturing With the figures in hand, this valuation seems appropiate. According to data collected by Bloomberg, its sales grew 8.4% last year, in line with the average 8.6% of its peers, although Ebitda grew 16%, twice the average of its competitors, which justifies the premium with which it is valued. Finally, its operating margin was 18%, compared to the average 16% of peers. Disclosure: The Luxonomist is not responsible for the views expressed in the article. The text has been written freely expressing their own ideas, without receiving any compensation. The author has no business relationship with any of the companies whose shares are listed in this article.