Save from as low as €40 per month Change modify pause
About the company
LVMH is a French multinational luxury goods conglomerate, headquartered in Paris. The company was formed by the 1987 merger of fashion house Louis Vuitton with Moët Hennessy, a company formed after the 1971 merger between the champagne producer Moët & Chandon and Hennessy, the cognac manufacturer.
Investment Thesis
We changed our stance on LVMH from a Neutral to an Overweight position with a price target of €167/share. Post the 2015 results, we are confident that the Group delivered and will continue to deliver positive results in the years ahead.
In 2015, the Group not only managed to generate positive results across all its divisions but we expect this positive trend to continue mainly through innovation, reduced costs and growth through acquisitions. The strong demand and increased profitability of its well renowned brands (even in difficult times) adds conviction in the positive outlook for this stock.
Another important positive for the Group is that it managed to increase its free cash flow by 30% in 2015 to €3.6bln. This puts LVMH in a favourable position where it can use the cash to either buy start-ups or return cash to shareholders via special dividends and/or share buybacks.
LVMH also raised the dividend on 2015 results by 11% to €3.55 a share.
Arguments in favour of LVMH:
Concerns
Division analysis:
Other;
Positive statement from management – LVMH Chief Executive Officer Bernard Arnault expressed confidence that the group can continue to outperform its luxury sector peers in the upcoming year, despite an “uncertain” business climate.
You are signing up to receive news, updates, general market announcement, articles and product or service marketing. By signing up you are consenting to our privacy policy and can unsubscribe at any time.