LVMH stock nears record high as revenue beats forecasts
By Sudip Kar-Gupta - Oct 12th, 08:32
Shares in LVMH climbed towards record highs on Tuesday, after the world’s biggest luxury goods company reported stronger than forecast revenue growth for the third quarter.
The shares were up 1.8% at €236.45 in early trading, after an earlier gain of 2.4% to €237.55 and near a record high of €239.65 reached in May.
The stock was also the top performer on France’s benchmark CAC 40 index, with the CAC slipping 0.1%, and its gains pushed up shares in other luxury goods companies, with Kering advancing by 1.6%.
"While this likely will be read positively across the sector, we think this performance sets LVMH ever more firmly as one of the best performers of the industry," wrote JP Morgan analysts, keeping an "overweight" rating on LVMH shares.
Deutsche Bank, Citigroup and Goldman Sachs also kept "buy" ratings on the shares.
LVMH, home to labels such as Louis Vuitton, Christian Dior, and Moet & Chandon champagne, reported on Monday that third-quarter like-for-like revenue, which strips out currency swings and acquisitions or disposals, grew 12% from a year earlier to €30.1bn.
That beat the 9% organic growth forecast in an analyst poll compiled for Reuters by Inquiry Financial and was in line with the previous quarter, in spite of a weaker showing by LVMH’s spirits unit and a tricky foreign exchange climate.
"Given LVMH’s size and diversity, the continued strong growth in 3Q despite tougher comparisons signals a positive demand environment amongst luxury consumers that is encouraging for the broader luxury sector," Goldman Sachs analysts wrote in a note.
LVMH shares are up about 30% so far in 2017, beating an 11% gain on the STOXX Europe 600 personal and household goods index, which contains other luxury goods stocks.© BusinessLIVE MMXVII
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