Buy Signal on LVMH (MC-FR)
LVMH has a strong track record, with a behavorial score of 10/10, therefore we consider the signal as a mid/long term one.
LVMH (Louis Vuitton Moet Hennessy) is a €340 Bn market cap and a a France-based luxury group active in six sectors: Wines and Spirits, Fashion and Leather Goods, Perfumes and Cosmetics, Watches and Jewelry, Selective Retailing and Other Activities.
Wines and Spirits owns brands, such as Moet & Chandon, Krug, Veuve Clicquot, Hennessy and Chteau Yquem, among others. Fashion and Leather Goods owns brands, such as Luis Vuitton, Christian Dior and Givenchy, among others. Perfumes and Cosmetics owns brands, such as Parfums Christian Dior, Parfums Givenchy Guerlain, Benefit Cosmetics, Fresh and Make Up For Ever, among others. Watches and Jewelry owns brands, including TAG Heuer, Hublo, Zenith, Bulgari, Chaumet and Fred, among others. Selective Retailing owns the brands DFS, Miami Cruiseline, Sephora and Le Bon Marche Rive Gauche, among others. Other Activities includes lifestyle, culture and the arts brands, such as Les Echos, Royal Van Lent, and Cheval Blanc. The Company is active worldwide.
With China a crucial market for luxury goods (30% of LVMH revenues and the main growth engine), every move by the ruling Chinese Gouvernment is scrutinized. Tensions with China or weakness in the chinese economy are the main risk for LVMH.
LVMH is clearly a "Buy & Hold" type stock, and the stock's recent drop seems an opportunity to reposition itself on this flagship Luxury stock.
As for 2022, LVMH's revenue is expected to reach € 76.5 Bn (+20% yoy) coupled with a 27% operating margin and a € 14 Bn net profit (+17% yoy). EPS growth is expected to reach double digit in the next two years. The stock crurrently offers a 1.7% dividend yield.
Short term catalyst : accelerating growth.
This signal looks consistent with the European Luxury sector in Major Bullish Trend. There is currently 81% of stocks within the sector in bullish tactical signal, and 25% in bullish strategic signal.