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Investing.com - TD Cowen has reiterated its Hold rating on LVMH (EPA:LVMH) Moet Hennessy Louis Vuitton SE (OTC:LVMUY) (EPA:MC) with a price target of EUR500.00. According to InvestingPro data, LVMH currently trades near its 52-week low, with shares down over 30% in the past year despite maintaining strong gross profit margins of 67%.
The research firm cited several key challenges facing the luxury goods conglomerate, including uncertainty in the Chinese market and potential negative or flat growth in the Fashion & Leather Goods division until fiscal year 2026.
TD Cowen noted positive aspects of LVMH’s strategy, including the company’s focus on new products and entry-level innovations at Dior and Louis Vuitton brands, as well as Tiffany’s key items performance.
The firm indicated it could become more positive on LVMH stock if consumer confidence improves in China, momentum continues in the U.S. market, and sustainable growth trends emerge in the Fashion & Leather Goods segment.
LVMH currently trades at a price-to-earnings ratio of 17.5x, compared to its three-year average of 21x and five-year average of 24x, according to TD Cowen’s analysis. The company has maintained dividend payments for 28 consecutive years, demonstrating consistent shareholder returns. For additional insights and exclusive financial metrics, subscribers can access more than 10 key ProTips on InvestingPro.
In other recent news, LVMH has experienced several significant developments impacting its financial outlook. Morgan Stanley (NYSE:MS) has downgraded LVMH’s stock from Overweight to Equalweight and reduced the price target to €590, citing a weaker-than-expected start to the year and a decline in Group Organic Sales Growth. The Fashion & Leather Goods division saw a notable sales decline, with expectations of continued contraction. Barclays (LON:BARC) also downgraded LVMH from Overweight to Equalweight, adjusting the price target to €550 due to concerns about a slowdown in the U.S. market, a crucial growth driver. The firm anticipates challenges in the Fashion & Leather Goods division and other segments like spirits and beauty, leading to a 16% reduction in earnings per share forecast for fiscal year 2025.
Meanwhile, Bernstein revised its price target for LVMH to €625 while maintaining an Outperform rating. The adjustment reflects a decreased growth rate expectation for the Fashion & Leather Goods division and other sectors, predicting a contraction in group organic sales growth. The firm’s analysts expect a margin contraction in fiscal year 2025, aligning with management’s previous indications. Morgan Stanley’s analysis suggests that LVMH’s Fashion & Leather Goods division may face its first four consecutive quarters of sales contraction in over 30 years, driven by reduced demand from Chinese consumers. These recent developments highlight the challenges facing LVMH in maintaining growth amid a softer global economic environment.
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