LVMH Relinquishes Place Among Europe's Top Five Biggest Stocks
LVMH lost its place among Europe's top five listed companies as the luxury-goods maker endures its worst year-to-date slide since the 2008 financial crisis.
The French company's shares fell about 3 percent on Thursday, taking their decline for this year to 25 percent. Its market value of about €239 billion ($270 billion) slipped below that of Swiss packaged-foods maker Nestle SA.
Like most luxury companies, LVMH is being weighed down by demand worries in China and concerns that Donald Trump's tariffs will weigh on consumer spending in the US. The company has been putting out cautious signals on second-quarter trends, according to people familiar with the matter.
'For shares to reprice we'd need to return to some growth in the industry and/or some relative outperformance versus peers,' Morningstar analyst Jelena Sokolova said. 'I think both are more likely than not over the medium-term but I'm not sure those will happen this year.'
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It's been a gradual retreat for a stock that claimed a spot in the world's top 10 as recently as 2023, and once rivalled Facebook-owner Meta Platforms Inc. in terms of size.
Investors fret that a recovery is looking elusive. Barclays Plc analyst Carole Madjo recently downgraded LVMH to equal-weight, saying she doesn't expect the firm's key fashion and leather-goods division to return to growth this year.
'On the back of the incremental headwinds facing the sector, especially in the US, we think the sector's earnings recovery story could be delayed,' Madjo said in a note.
By Kit Rees and Julien Ponthus
Learn more:
LVMH Said to Signal Continued Weakness on China Woes
The French luxury behemoth is warning investors and analysts that demand remains soft this quarter amid lacklustre consumer confidence, particularly in China, sources told Bloomberg.
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