Stock price when the opinion was issued
Chart shows how stock's come off. Behemoth in luxury goods. Very well positioned. Reported results a week ago, most of the stock move was already baked in. Great track record of executing through slowdowns. Trades at only 20x earnings; cheaper than COST or WMT, but with higher growth over the long term because of positioning and superb margins. (Price target in euros.) Yield is 2.1%.
Thinks stock can be up 20% over next 12-18 months.
Enjoys big gross margins, but shares have fallen because consumers, notably China, have slowed down in a slow post-Covid recovery. But this is priced into the stock now. LVMH continues to grow their brands, the best in luxury. Tiffany will benefit them in the next little while. They continue to innovate.
Diversified, high-luxury company. Toll road for high luxury, and that runs through China (1/3 of its customer base). A clean, quality, Chinese consumer proxy. More to go if you think the China stimulus is real. (Price target in euros.) Yield is 1.9%.
If the Chinese stimulus is not that effective, he's less positive on it, as that's this stock's biggest driver. It is a higher-risk proxy, but his other Top Picks are low beta to compensate.
Behemoth and benchmark in luxury goods. Stock's been weak as consumers have pulled back globally, especially in China and US. Historically over all these cycles, their brands have performed very well. ROIC is very high, and can be sustained even through weak times. Very cheap at 17x PE. Growth is probably 0% this year, but once tariffs come through it will be bullish for the global luxury market.
With so many brands under one banner, very flexible in terms of allocating capital and marketing support to one brand or another. (Price target in euros.) Yield is 2.6%.
Will continue to hold. Believes company is very high quality. Luxury market will always remain. High income earners will always have capital to spend on high end goods. Price "in-sensitive" shoppers will always exist. Large amount of brands that will always be strong.