Luxury market anticipates its resurgence, according to Oberbulle's forecast.
The luxury sector is poised for a recovery in the second half of the year, as indicated by Bernstein analyst Luca Solca. Potential drivers for this recovery include a more stable consumer mood in China, catch-up effects in the US market, and an improved mood in Europe.
Two of the top players in the luxury sector, Hermès and LVMH, are praised for their authenticity, pricing power, and attractive portfolio. Solca rates LVMH as a turnaround opportunity, with a rating of "Outperform" and a target price of 600 euros. Hermès maintains its "Outperform" rating and a target price of 2800 euros.
Kering, another major luxury group behind brands like Gucci and Balenciaga, has shown signs of recovery following leadership changes. Solca upgraded his forecast for global luxury demand to flat for the year 2025, indicating cautious optimism about market recovery despite broader challenging conditions. Kering's shares rose by 7.2% on news of a new CEO, which Solca sees as a positive step toward recovery and growth. Kering's target price remains unchanged at 170 euros with a "Market-Perform" rating.
Some brands are focusing on strategic realignments to improve performance. Swatch Group and Richemont are benefiting from the strong Swiss franc, which is strengthening their position in the global market. Solca rates Swatch as "Outperform" with a target price of 160 euros. For EssilorLuxottica, Solca sets a target price of 245 euros with an "Market-Perform" rating.
The recent weakness of the US dollar is acting as a headwind for the sales and margins of European luxury giants. However, two-thirds of sales for luxury goods manufacturers like Kering and LVMH are generated in US dollars or currencies pegged to the dollar, which could potentially mitigate this effect.
Burberry and LVMH are also predicted to experience a turnaround, according to Solca. The rating for Richemont remains "Outperform" with a target price of 190 euros.
It is important to note that the precise stocks Solca recommended for recovery in the second half of 2021 and their target prices are not available in the retrieved documents. This specific data might come from a detailed Bernstein research note or financial report not included here.
Investors looking for detailed, dated stock recommendations and target prices from Luca Solca for 2021 may need to access Bernstein’s historical analyst reports or financial news archives specializing in luxury sector equity analysis.
The author holds positions in LVMH. The management and majority shareholder of the publisher Börsenmedien AG, Mr. Bernd Förtsch, also has positions in LVMH and Kering.
- The recovery of the luxury sector, as predicted for the second half of the year, presents opportunities for investors, with analyst Luca Solca rating LVMH as a turnaround opportunity and assigning it an "Outperform" rating with a target price of 600 euros.
- In the fashion-and-beauty sector, brands like Hermès and Kering are also receiving positive outlooks, with Hermès maintaining its "Outperform" rating and a target price of 2800 euros, and Kering's shares rising and the target price remaining unchanged at 170 euros with a "Market-Perform" rating.
- For those interested in business diversification, investing in companies like Swatch Group, Richemont, and EssilorLuxottica could be strategic, with Solca rating Swatch as "Outperform" with a target price of 160 euros, placing a target price of 245 euros on EssilorLuxottica with an "Market-Perform" rating, and setting a target price of 190 euros for Richemont with an "Outperform" rating.
