LVMH: Oddo confirms rating after results
(CercleFinance.com) - Oddo underlines that organic sales growth of +8% in Q4 is pretty much in line with expectations, although this has stalled slightly from the 11% recorded in the previous quarter.
Meanwhile, operating profit for the year (11.5 billion euros) exceeds expectations, albeit slightly (consensus of close to 11.4 billion euros). Following this publication, Oddo confirms its buy rating on the share with a target of 471 euros (just over 13% upside).
The broker considers that the performance in Fashion and Leather Goods remains exceptional, noting that Bulgari (Jewellery), major brands in Perfumes and Cosmetics (double-digit sales growth in Q4) and Sephora (selective retail) performed solidly, while M&M's sales growth remained exceptional in Q4, with robust performance at Louis Vuitton and Dior (organic growth reached +15%).
However, Oddo explains that several negative factors, some of which are non-recurrent, weighed on results. These included a greater fall in DFS' results, which makes 30% of its sales in HK in Selective Distribution, impairments of stocks of new cosmetics brands in the US at the Perfumes & Cosmetics division, while other charges were weighted on by the donation made to help restore Paris Notre Dame Cathedral and costs related to Tiffany, which were increased by extensive FX hedging that weighed on its financial result.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Meanwhile, operating profit for the year (11.5 billion euros) exceeds expectations, albeit slightly (consensus of close to 11.4 billion euros). Following this publication, Oddo confirms its buy rating on the share with a target of 471 euros (just over 13% upside).
The broker considers that the performance in Fashion and Leather Goods remains exceptional, noting that Bulgari (Jewellery), major brands in Perfumes and Cosmetics (double-digit sales growth in Q4) and Sephora (selective retail) performed solidly, while M&M's sales growth remained exceptional in Q4, with robust performance at Louis Vuitton and Dior (organic growth reached +15%).
However, Oddo explains that several negative factors, some of which are non-recurrent, weighed on results. These included a greater fall in DFS' results, which makes 30% of its sales in HK in Selective Distribution, impairments of stocks of new cosmetics brands in the US at the Perfumes & Cosmetics division, while other charges were weighted on by the donation made to help restore Paris Notre Dame Cathedral and costs related to Tiffany, which were increased by extensive FX hedging that weighed on its financial result.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.