Bernard Arnault’s LVMH (FRA40:LVMH) jumped on Wednesday as the stock looks to arrest a sharp decline this year.
The price of MC is setting up for a strong week and could look to take back the key level of 536 that was support for the final leg of gains into 2023 and 2024.
The rise in the stock was due to Goldman Sachs’s decision to add LVMH to its European Conviction Buy list, saying investors should look through second-quarter softness and called LVMH “a clear winner in the next luxury upcycle”.
Billionaire French owner Bernard Arnault was previously rubbing shoulders with Elon Musk for the title of the world’s richest man. However, a decline in his stock has seen him fall to number seven on that list.
LVMH has been struggling with a weaker economy in China and a cautious consumer, while there was also uncertainty around the trade situation. Under Arnault, the Paris-based fashion conglomerate has grown into the world’s largest luxury group, with a mixed portfolio of 75 high-end brands, including Louis Vuitton, Dior, and Fendi.
Goldman’s rival investment bank, Morgan Stanley, cut its price target on LVMH less than two weeks ago from €560 to €510, saying earnings could be pressured by operating deleverage and adverse foreign exchange moves.
The bank also lowered its organic sales growth forecast for the first half of 2025 to -7.5% year-on-year, citing weaker demand from key consumer groups, especially Chinese tourists in Japan.
Recent quarterly retail data was positive for the company with resilient demand across Asia and North America, which could add to some short-covering in the stock.
