u/According-Buyer6688

Author argues LVMH trades at ~18x P/E versus a historical average of ~25x despite being the best luxury conglomerate with 75 brands, family ownership (~49% Arnault), and strong capital allocation. The re-rating mechanism is mean-reversion to ~25x earnings, which the author calculates implies ~38% upside on 2026 earnings and ~55% on 2027 earnings. Catalysts cited are returned organic growth in most divisions (except leather and clothing), strong Tiffany/Bvlgari jewelry performance, and an increased stake in double-digit-growing Loro Piana, plus dividends and buybacks. Main risk implied is a prolonged consumer shift away from fashion toward experiences/health (Ozempic, HYROX) delaying the luxury demand recovery.

The author argues Ferrari is undervalued at ~32x P/E versus its ~45x historical norm, with EPS growing ~8% annually, a €3.5bn buyback (5-8% of shares), a ~1.5% dividend, and unlimited luxury demand. Catalysts include entry into yachting from 2027 and the EU abolishing its diesel ban, which the author expects to lift EPS. Target valuation of €450-510 implies 50-70% returns over a two-year horizon; the main stated risk is that the discount persists until the next financial crisis.