LVMH: Credit Suisse raises target price
(CercleFinance.com) - Credit Suisse reiterates its "outperform" rating on the LVMH share and having increased its corresponding target price to 640 euros from 540 euros (current price: flat at 611 euros).
After a strong first quarter for LVMH, the broker has increased its organic sales forecast by 6% for 2021-2023. At the same time, 2021-2023 EPS are expected to increase by an average of 13%, "due to positive operating leverage and favourable divisional mix".
The broker points out that despite the effects of the pandemic, the Wines & Spirits and Perfumes & Cosmetics divisions have shown strong improvement since Q4 2020.
"Strong underlying demand in cognac, coupled with retailer restocking ahead of a price hike, helped boost 1Q but is likely to normalise in 2Q," Credit Suisse says, which nevertheless expects an operating margin to be 22.4% in 2021, which is 100 bp above the 2019 level.
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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.
After a strong first quarter for LVMH, the broker has increased its organic sales forecast by 6% for 2021-2023. At the same time, 2021-2023 EPS are expected to increase by an average of 13%, "due to positive operating leverage and favourable divisional mix".
The broker points out that despite the effects of the pandemic, the Wines & Spirits and Perfumes & Cosmetics divisions have shown strong improvement since Q4 2020.
"Strong underlying demand in cognac, coupled with retailer restocking ahead of a price hike, helped boost 1Q but is likely to normalise in 2Q," Credit Suisse says, which nevertheless expects an operating margin to be 22.4% in 2021, which is 100 bp above the 2019 level.
Copyright (c) 2021 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.