While the world is grappling with macro uncertainty, the first quarter performance of high-end luxury brands shows that they remain unfazed by the weakness in the global macro environment and war-led disruptions in Europe. Recently, Hermes (GB:0HV2)(HESAF) and LVMH Moet Hennessy Louis Vuitton (GB:0HAU)(LVMUY) delivered solid Q1 performances, which were reflected in strong sales growth.
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Hermes’ consolidated revenue for the March-ended quarter jumped 22% on a constant currency basis, with broad-based growth across all regions. Further, the company benefits from a loyal customer base and strong momentum in Greater China.
As for LVMH, the world’s leading fashion house, it recorded a 17% growth in organic and overall sales. The company witnessed robust demand from local customers and international travelers in Japan and Europe. Further, the Asian market registered a significant rebound.
While these top luxury brands continue to outperform the broader market, let’s examine what analysts recommend for their stocks.
What’s the Prediction for Hermes Stock?
Hermes’ management remains upbeat and expects the momentum in sales to sustain itself despite economic, monetary, and geopolitical uncertainties. However, given the recent rally in its stock price, analysts maintain a cautiously optimistic outlook.
Hermes stock has received four Buy, six Hold, and one Sell recommendations for a Moderate Buy consensus rating. Meanwhile, analysts’ average price target of €1,827.09 implies 6.95% downside potential.
Is LVMH a Buy, Sell, or Hold?
The recovery in Asia and strong demand in Japan and Europe will likely support the company’s sales. LVMH stock has a Strong Buy consensus on TipRanks based on 18 Buy and one Hold recommendations. Further, analysts’ average price target of €944.89 implies 5.81% upside potential.
Bottom Line
Thanks to their loyal customer base, luxury fashion houses remain unfazed by macro and geopolitical headwinds. Meanwhile, the recovery in Asia and ongoing momentum in Europe will likely support their financials in the coming quarters.
