Stifel maintains its Buy rating on LVMH shares, with an unchanged target price of 925 euros.

The analyst reports that last week he organized a LVMH roadshow in New York and Boston, with Jean-Jacques Guiony, CFO, and Rodolphe Ozun, Head of Investor Relations.

Following this meeting, Stifel reports that Louis Vuitton's (LV) sales momentum in the US has been declining since mid-2022, mainly due to inflation and consumer debt.

According to Stifel's note, aspirational customers (i.e. those who buy at least one luxury product, spending on average between 3,000 and 10,000 euros per year) represent around 30-40% of Louis Vuitton's clientele (for 20-30% of Louis Vuitton's sales), compared with around 20% of Dior's clientele (for 10% of Dior's sales) in the USA.

LV and Dior are thus seeking to retain aspirational consumers. The houses have also developed a pricing strategy to ensure that price adjustments are communicated effectively to emphasize value and exclusivity.

In Europe, there is a 'weakened' demand from low-level aspirational consumers, while affluent and high-end consumers continue to show resilient demand

Finally, Stifel reports that LVMH expects medium-term growth of 10% in China, driven by the expansion of the middle class.


Copyright (c) 2024 CercleFinance.com. All rights reserved.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.