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Investing.com - Berenberg downgraded LVMH (EPA:MC) (OTC:LVMUY) from Buy to Hold on Thursday, while maintaining a price target of EUR570.00.
The downgrade comes as the luxury sector faces a broader downturn, with Berenberg noting that constraints on aspirational consumers are more severe than initially modeled in their analysis.
Despite the rating cut, Berenberg acknowledged LVMH’s "unique strengths" including its scale, brand strength, management depth, and cash flows, which position the company to navigate the current market challenges and potentially gain market share from competitors.
The investment firm warned that LVMH’s revenue growth will likely be constrained in the near term and may disappoint investors, creating risk for further analyst downgrades.
Berenberg indicated that LVMH’s relative valuations, which are approaching multi-year lows, offer support for the Hold rating rather than a more negative outlook on the luxury goods maker.
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