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Investing.com - UBS upgraded LVMH (EPA:MC), the $346 billion luxury goods giant with impressive gross profit margins of 66%, from Neutral to Buy and raised its price target to EUR680.00 from EUR513.00, citing returning positive earnings per share momentum.
The Swiss bank noted that over the past two years, 2025 estimates for the luxury goods conglomerate, which generated $97.5 billion in revenue over the last twelve months, have decreased by approximately 40%, with group margins returning to pre-Covid levels.
UBS highlighted that LVMH’s third-quarter results demonstrated that actions taken by the company to improve performance in its crucial Fashion & Leather Goods division are proving effective.
The bank believes the underlying improvement in sales momentum will drive an eventual pickup in margins and a return of EPS momentum, which typically influences luxury stock performance.
LVMH’s group margins for fiscal year 2025 are estimated by UBS to reach 21.2%, compared to 21.4% in 2019, indicating a near-complete recovery to pre-pandemic profitability levels despite the "complex" sector environment.
In other recent news, LVMH has been the focus of multiple analyst updates and a notable data breach investigation. TD Cowen raised its price target for LVMH to EUR550, maintaining a Hold rating, citing strong performance in Dior’s makeup and skincare lines. Goldman Sachs also adjusted its price target to EUR625, maintaining a Buy rating, and highlighted an expected improvement in the Fashion & Leather division. Jefferies increased its price target to EUR470, sustaining a Hold rating, reflecting a 4.4% rise in its valuation target. HSBC upgraded LVMH to a Buy, raising its price target to EUR625, with expectations of a rebound at Dior under Jonathan Anderson’s creative direction. Additionally, LVMH’s Louis Vuitton brand is under investigation by Hong Kong’s privacy watchdog following a data breach affecting around 419,000 customers. The breach involved sensitive customer information, including names, passport details, and shopping history. These developments highlight significant movements within LVMH’s operational and strategic landscape.
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