LVMH shares (Moët Hennessy Louis Vuitton) reached on Thursday, September 3, their lowest level since November 2020, trading at 427 euros. The European luxury sector company is falling more than 33% since the beginning of the year and has already broken 14% in the space of a year.
Analysts consulted by the Wall Street Journal pointed to several reasons for this performance. Among them are the prospects regarding the Chinese market, where recovery "may be stalling again," as Bernstein argued, and where demand prospects "continue to be discouraging." The institution sets the target price for LVMH at 570 euros, a 33% rise from the September 3 low.
Luxury demand from the wealthiest in China "is declining" and fears that fiscal measures targeting offshore wealth may have an "inhibitory effect" on the sector are also conditioning performance. Added to this is the conflict in the Middle East.
JP Morgan analysts said the outlook for the luxury sector "will not become positive anytime soon," adding that sales in China "point to continued volatility and weak trends" in the region, something the bank expects to continue until 2027.
