LVMH: Bank of America upgrades stock

(CercleFinance.com) - Bank of America upgrades LVMH shares from 'neutral' to 'buy', with a target price raised from E700 to E735, representing 13% upside potential, while including the stock, one of its '25 stocks for 2025', in its 'Europe 1' list of best ideas.


The broker points out that trends in luxury goods are gradually improving from the third-quarter lows, that cost growth is under control in 2025, and that exchange rates have turned around favorably.

As such, the EPS downward revision cycle has come to a halt, BofA adds, pointing out that LVMH is trading on a P/E multiple of 23x for 2025, a mid-cycle multiple located at the low point of the earnings cycle.

Any evidence of a reacceleration in earnings should result in a revaluation of the P/E towards the upper end of the historical valuation range, as it has done at other turning points in the cycle, it continues.


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