LVMH: Oddo raises target price

(CercleFinance.com) - Oddo underlines that the luxury group's FY2020 EBIT of 8,305 million euros, came in nearly 15% above the analyst's estimates and exceeded the consensus by over 10%, which translates into a +7% increase in H2 alone.


Following this announcement, Oddo confirms its buy rating on the stock, raising its corresponding target price to 575 euros (vs. 560 euros previously).

The broker says that these excellent figures reflect a spectacular recovery in Fashion and Leather Goods, where sales continued to report double-digit growth in the second half of the year, culminating in organic growth of 18% in Q4, after 12% in Q3.

Equally spectacular, this division's EBIT growth reached 32% over the half year, with a nominal margin reaching 41% (compared to 34.7% in H2 2019 and 19.5% in H1, Oddo was expecting 34%) it adds.

In Fashion and Leather Goods, the acceleration in growth in Q4 was surprisingly strong: the broker was more cautious than the consensus at +7%, although, at just over 10%, this was also largely exceeded.

This acceleration stems from an even more favourable Q4 versus Q3 trends in China and, to a lesser extent, Japan (favourable comparison effect) and continued strong local demand in the US and Europe.


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