CFRA upgrades LVMH to Buy, highlighting quarterly growth

CFRA Research upgraded LVMH to a Buy rating (From Hold) and raised their 12- month price target on the luxury retailer’s shares to EUR790.00 (From EUR760.00) .

LVMH reported positive growth in 2023 across its segments: Fashion and Leather Goods revenues increased by 14%, Perfumes and Cosmetics by 11%, Watches and Jewelry by 7%, and Selective Retailing by an impressive 25%.

LVMH highlighted an improvement in growth from the third to the fourth quarter, but acknowledged that foreign exchange had a negative impact in the second half of the year. Notably, Selective Retailing, featuring brands like Sephora and DFS, achieved a remarkable 76% growth in profit from operations, emerging as the standout business segment.

CFRA analysts see the company’s shares as attractive as they anticipate substantial growth in both revenue and profit in 2024, particularly driven by Selective Retailing, and considering the shares’ valuation at the lower end of its 5-year range.

CFRA lowered their 2023EPS estimate by EUR0.96 to EUR35.10 and initiates a 2025 EPS estimate at EUR37.50.