Luxury stocks in demand in Paris as Barclays upgrades both LVMH and Kering
LVMH and Kering are among the top performers on the CAC 40 index on Tuesday morning, buoyed by a rating upgrade from Barclays analysts, who believe both stocks could benefit from a re-acceleration in luxury sector growth.
Around 10:30 a.m., LVMH shares rose 0.7% to 455.1 euros, while Kering gained 1.1% to 241.1 euros. By comparison, the CAC 40 was down 0.6% at the same time.
In a sector note titled 'After the Boom', the British bank attempts to distinguish the winners and losers of the new phase the industry has entered, notably marked by a shift in consumer behavior.
According to its forecasts, the sector is expected to grow by approximately 3% this year, before 'stabilizing' with growth of around 4% in 2027.
'In this context, we favor companies capable of gaining market share and activating their own self-help growth levers, while trading at historical discounts without major risk of consensus downward revisions', Barclays states.
'For us, LVMH ticks all the boxes', the London-based institution emphasizes.
Its recommendation has consequently been raised from 'equal weight' to 'overweight', with the price target increased from 570 to 620 euros.
Outperformance following profit-taking
According to Barclays, LVMH is trading at its most attractive valuation levels seen in a long time: after a 26% correction since the start of the year (compared to a 5% rise for the MSCI Europe), the stock is trading at approximately 20 times 12-month forward earnings. This represents a 16% discount to its historical average, making it the cheapest stock in its coverage universe with the exception of Prada.
On Kering, the bank explained it has moved from 'underweight' to 'equal weight', with its target revised upward from 255 to 300 euros.
'We favor stocks capable of delivering above-market growth through their own internal levers', its analysts reiterate in the study.
'With a compound annual revenue growth rate of 8%, an operating margin expansion of approximately 10 percentage points, and a 55% increase in earnings per share by 2028, Kering possesses the ideal profile', they highlight.
This rebound comes after LVMH and Kering fell sharply yesterday, following comments from Berenberg advising investors to take profits on the sector after the market recovery that followed the easing of tensions in the Middle East.
LVMH Moët Hennessy Louis Vuitton SE is the world leader in luxury products. Net sales break down by family of products as follows:
- fashion and leather items (46.7%): brands such as Louis Vuitton, Christian Dior, Celine, Loewe, Kenzo, Givenchy, Fendi, Emilio Pucci, Marc Jacobs, Berluti, Loro Piana, etc.;
- watches and jewels (13%): Bulgari, TAG Heuer, Zenith, Hublot, Chaumet, Fred brands, Tiffany, etc.;
- perfumes and cosmetics products (10.1%): perfumes (Christian Dior, Guerlain, Loewe, Kenzo, Givenchy brands, etc.), makeup products (Make Up For Ever, Guerlain, Acqua di Parma, etc.), etc.;
- wines and spirits (6.6%): champagnes (Moët & Chandon, Dom Pérignon, Veuve Clicquot, Krug, Ruinart, Mercier, Château d'Yquem, Domaine du Clos des Lambrays, Château Cheval Blanc, Colgin Cellars, Hennessy, Glenmorangie, Ardbeg, Belvedere, Woodinville, Volcán de mi Tierra, Chandon, Cloudy Bay, Terrazas de los Andes brands, etc.; No. 1 worldwide), wines (Cape Mentelle, Château D'Yquem, etc.), cognacs (mainly Hennessy; No. 1 worldwide), whisky (mainly Glenmorangie), etc.;
The remaining net sales (23.6%) are from selective distribution through the Sephora, DFS, Miami Cruiseline chains and Le Bon Marché and La Samaritaine department stores.
At the end of 2025, products are marketed via a network of 6,283 outlets located throughout the world.
Net sales are distributed geographically as follows: France (8.3%), Europe (18%), Japan (7.9%), Asia (26.5%), the United States (25.6%) and other (13.7%).
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