Homeluxury bag → Luxury gains weight on the stock market: three firms are already listed among the 15 largest Europeans

Luxury gains weight on the stock market: three firms are already listed among the 15 largest Europeans

  1. Violet Grandson

French luxury imposes itself strongly on the European stock markets in 2021. More specifically in the Stoxx 600 -the stock market index made up of the 600 largest companies by European capitalization- in which three of the most renowned fashion firms have managed to establish themselves this year in the top 15: Louis Vuitton, Hermés and Christian Dior. The first, in addition, has managed to surpass Nestlé in capitalization and has been crowned the queen of the Stoxx 600. El lujo gana peso en la bolsa: tres firmas cotizan ya entre las 15 grandes europeas El lujo gana peso en la bolsa: tres firmas cotizan ya entre las 15 grandes europeas

For its part, Hermés is established as the most bullish company in the Paris Cac 40 -the index that includes the 40 most significant stocks among the 100 largest companies traded on the Paris Stock Exchange-, advancing 73% in the year, compared to the 25% recorded by the French index.

Capitalization improvements

Hermés has been, of the three, the company that has increased its market capitalization the most so far this year. Specifically, the value of the company is currently 161,000 million euros , nearly 70,000 million more than its capitalization at the end of 2020, which represents an increase of 73% .

Christian Dior has added around 40,000 million euros in capitalization in 2021 , reaching 124,000 million. This implies a difference of 50% with respect to the end of the previous year.

LVMH has also increased its market value by more than 90,000 million euros, reaching 352,000 million in capitalization. This is an increase of 37% compared to what was obtained at the end of 2020.

All this has made the three French houses have risen positions in the Stoxx 600 throughout 2021 (see table). Louis Vuitton was in second place behind Nestlé last year, but with its improved capitalization it has overtaken the food company and is now the leading company in the European index .

El lujo gana peso en la bolsa: tres firmas cotizan ya entre las 15 grandes europeas

Hermés is not only the most bullish company in the Cac 40, but has also improved 10 positions in the European index and has slipped into the top 10 largest companies in all of Europe, reaching eighth position . The firm has also achieved a gap among the fifty values ​​of the EuroStoxx 50 .

The case of Christian Dior is similar. In 2020 he was outside the top 20 of the Stoxx 600, at 21st, but has managed to improve up to six places and has established himself on the 15th step.

good results

The improvements were also reflected in the results of the companies. Hermés released its latest numbers on October 21, and less than a month later it hit its all-time highs , trading at around 1,675 euros. In the third quarter alone , the company pocketed a total of 2.37 billion euros in sales , which represented an improvement of 31% compared to the same period of the previous year, according to a report presented by the company itself.

Its revenues also increased in all of its international markets , with Asia (excluding Japan) posting the biggest rise of 63%. The company touched its minimum in January, trading at 838 euros and since then it has rebounded more than 80%.

The consensus of analysts gathered by FactSet estimates that the French company will reach 2,598 million euros in profit in 2022, and 2,893 million in 2023 , which represents an increase of 11% in both cases in relation to the consensus for 2021. However, the current valuation is below the listing price (1,525 euros) and has a target price of 1,368 euros per share and a hold recommendation.

The holding company - a group of companies formed around a company that controls all or most of its shares - LVMH, which includes Louis Vuitton and Christian Dior, also presented good results in October.

Revenues managed to exceed analyst estimates, according to a Bankinter report, by reaching 15,512 million euros , compared to the 14,958 estimated by Bloomberg. These revenues also represented an increase of almost 30% compared to the same period of the previous year and total revenues in the first nine months of the year, which amounted to 44,177 million euros, an increase of 46% . In Bankinter they add that "the strength in the United States and Asia is maintained. Europe improves, but it still reflects the impact of the restrictions."

Within LVMH, the sector that grew the most was Fashion and Leather, which experienced a growth of 38% "driven by the best-known brands such as Louis Vuitton and Dior, which continue to gain market share and raise prices," they explain from the same bank.

On November 25, the French giant touched its annual highs when trading at 731 euros and is now trading at 699 . The FactSet consensus establishes an upside potential of 12% , with a target price of 780 euros per share. Its profits are also expected to grow up to 13% in 2022 , almost reaching almost 12,000 million and more than 23% in 2023 , with a profit of 13,000 million. His recommendation is to buy .

Looking further back in the table, another luxury fashion house breaks into the top 30 companies of the Stoxx 600. Kering, the parent company of Gucci, Bottega Venetta and Yves Saint Laurent, has moved up two places this year in the European index. . With a capitalization of almost 86,000 million euros, it has an upside potential of 14% , with a target price of 782 euros and a buy recommendation.

Related

comments0WhatsAppFacebookTwitterLinkedin
Tags: