LVMH: Oddo BHF confirms 'buy' rating

(CercleFinance.com) - Oddo BHF maintains its buy rating advice on the share of the luxury giant LVMH, whose quarterly sales were punished by the market yesterday, with the share hit badly, falling 7.
1%.

"No surprise," its note says, with the broker adjusting its target price from 315 euros to 310 euros in the wake of revised EPS estimates.
Indeed, organic growth slowed slightly in Q3, although at 10% this is in line with market expectations, the broker says in a note. In addition, the group's star Fashion & Leather Goods division posted growth of 13%, which exceeds the consensus, as did Wines & Spirits (+7%). This is despite slight disappointments at watches and jewellery, and perfumes & cosmetics.

In short, despite a difficult comparison basis, LVMH still displays strong growth which, if it is normalised, remains "solid," Oddo BHF says. How then can we explain the stockmarket sanction yesterday? Growth in Chinese demand is falling slightly, although still remains at double digit; only Japanese demand has slowed down significantly, the broker says. In addition, it seems that September has been a little weaker in the sector compared to the summer months; this development is contributing to the market's stress, analysts add.

However, note that the momentum of the very profitable Fashion & Leather goods and Wines & Spirits suggests that margins will improve.



Copyright (c) 2018 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.