On Wednesday, CFRA raised its rating for LVMH Moet Hennessy Louis Vuitton SE (MC:FP) (OTC: OTC:LVMUY) shares from Buy to Strong Buy, maintaining a price target of EUR913.00. The firm adjusted its earnings per share (EPS) estimates for 2024 and 2025 downward by EUR1.50, setting them at EUR33.60 and EUR36.00, respectively.
This revision follows LVMH's reported normalized EPS of EUR14.55, which fell short of consensus estimates by EUR1.02 on revenues of EUR41.7 billion, slightly below the expected EUR42.2 billion.
In the first half of the year, LVMH's various business groups showed mixed performance. The Fashion & Leather segment saw a modest organic revenue increase of 1% year-over-year, while Selective Retailing experienced an 8% rise.
Conversely, the Watches & Jewelry division faced a 3% decline. Perfume & Cosmetics enjoyed a 6% increase, but Wine & Spirits suffered a 9% drop. Overall, LVMH's operating profit decreased by 8% year-over-year to EUR10.7 billion, primarily due to exchange rate fluctuations.
Despite these mixed results, CFRA remains optimistic about LVMH's market position, highlighting the strength of its luxury brand portfolio. The firm points to recent acquisitions, such as Tiffany and Sephora, as sources of excitement and potential growth.
Moreover, with LVMH's forward price-to-earnings (P/E) multiple at the lower end of its three-year range and current market expectations for luxury brands being quite low, CFRA suggests that it is an opportune time to invest in the company.
LVMH has also announced that it will distribute a dividend of EUR5.50 in December, signaling the company's intent to return value to its shareholders. CFRA's endorsement reflects a confidence in LVMH's enduring appeal and its ability to navigate the luxury market effectively, even as it faces global economic challenges.
In other recent news, LVMH Moet Hennessy Louis Vuitton SE has experienced a series of developments. The company's first-half 2024 results showed a modest 1% growth, falling short of market expectations. Goldman Sachs, in response, lowered its price target on LVMH shares from EUR 960.00 to EUR 930.00 but maintained a Buy rating.
Citi reaffirmed its Buy rating on LVMH, despite a sequential slowdown in organic sales growth. However, UBS revised its price target for LVMH shares, reducing it from EUR844.00 to EUR800.00, while maintaining a Neutral rating, anticipating a 2% earnings per share decrease for LVMH for fiscal years 2024 through 2026.
In the meantime, LVMH has made strategic moves by acquiring Swiss clock manufacturer L'Epee 1839 and French bistro Chez l'Ami Louis, indicating a focus on experiential luxury offerings. LVMH's first-quarter sales of €20,694 million closely aligned with market projections, despite a 2% decrease compared to consensus. These are recent developments that investors are likely to follow closely.
InvestingPro Insights
As we delve into the financial health and market position of LVMH Moet Hennessy Louis Vuitton SE (OTC: LVMUY), several metrics stand out. With a robust gross profit margin of 68.8% in the last twelve months as of Q4 2023, LVMH demonstrates its ability to maintain profitability despite market fluctuations. This impressive margin aligns with CFRA's positive outlook on the company's strength within the luxury goods sector.
Furthermore, LVMH's commitment to shareholder returns is evidenced by a 28.88% dividend growth and the fact that it has raised its dividend for 3 consecutive years, with a consistent track record of 27 years of dividend payments. The company's market capitalization stands at a commanding $373.35 billion, affirming its stature as a leading player in the industry.
InvestingPro Tips highlight LVMH's low price volatility and its status as a prominent player in the Textiles, Apparel & Luxury Goods industry. For investors considering capitalizing on LVMH's market position, there are additional tips available on InvestingPro. In total, there are 13 more InvestingPro Tips that can offer deeper insights into the company's performance and potential investment opportunities.
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