Despite recently losing out to L’Oréal in a bidding battle for the Aesop cosmetics brand, the market strength of LVMH has never been higher after becoming the first European company in history to achieve a valuation of more than $750 billion (€454 billion). Shares for the French luxury conglomerate climbed 0.3% to €903.70 at 10:43 on Monday morning, cementing the position of LVMH as one of the top ten companies in the world in terms of size.
According to Bloomberg, the luxury sector is enjoying unprecedented success following the gradual reopening of China after pandemic lockdowns, with Hermès becoming the second-largest player in global luxury earlier this month after reaching AU$326 billion (€200 billion) in value. In tandem with the growing strength of the euro over the last two months, this spike in luxury buying has also resulted in a jump in the personal net worth of LVMH boss Bernard Arnault which now sits at more than $350 billion (€211 billion).
“Luxury stocks embody what the equity market has best to offer at the moment: exposure to Chinese consumption, which continues to surprise on the rise, and robust margins thanks to their pricing power,” Lilia Peytavin, European portfolio strategist at Goldman Sachs in Paris, told Bloomberg. “This differentiates Luxury from Tech, whose margins have been contracting for several quarters already.”
The continued success of LVMH has seen the group grow 350% since December of 2018, making it one of the most successful in the world over the last half-decade. Analysts believe there’s still further growth for LVMH to be enjoyed, with one Bank of America Corp. boss predicting the stock to hit €1,000 in the next 12 months.
