LVMH LVMH Moët Hennessy Louis Vuitton SE : Bullish and Bearish Analyst Opinions

LVMH weak on Middle East sales drop.

LVMH improving in U.S. and China.

Thread Guy is short LVMH, stating the stock is down 40% from its high and just posted its worst Q1 in history, worse than 2008. The luxury market is being decimated by high-quality counterfeits, mirroring the collapse of the sneaker market. The prevalence of indistinguishable fakes (e.g., on Canal Street) removes the social pressure and incentive for non-wealthy consumers to buy authentic goods. The "era of designer is falling on hard times" as the core consumer base erodes, making the sector structurally unattractive. A reversal in the counterfeit trend or a successful crackdown by luxury brands protecting their IP and brand value.

LVMH trades at a forward P/E of ~18x, below its 5-year average of 26x, and has secured a 10-year main sponsorship deal with the rapidly growing F1. The lower valuation is a temporary punishment for China/geopolitical risks, while the F1 sponsorship provides a long-term brand growth vector in wealthy markets like the Middle East. The stock is undervalued relative to its historical norm and is positioned for a re-rating as growth concerns ease and the F1 partnership bears fruit. Prolonged slow growth in China, escalation of Middle East conflict impacting luxury demand, failure of F1 sponsorship to drive brand value or sales.

LVMH's luxury brands (Louis Vuitton, Tiffany, Sephora) remain powerful, and current earnings weakness is cyclical, not structural. Earnings could grow 60-70% over five years (~11% annual growth plus ~2% dividend), driven by brand strength and long-term demand growth in China as wealth rises. LONG because the brand moats are intact, the valuation is reasonable after a downturn, and the company is well-positioned for cyclical recovery. Prolonged luxury downturn, especially in China, or secular decline in spirits consumption.

The Coach CEO states, "You have seen some of those European handbag makers raise their prices... I find it offensive that somebody has to save four months of salary to buy a handbag." European luxury conglomerates (LVMH, Kering) have aggressively raised prices, effectively abandoning the aspirational/entry-level consumer. This creates a vacuum that Coach is filling. As Gen Z becomes more value-conscious ("very value driven"), the ultra-luxury brands risk losing volume growth to accessible alternatives. AVOID European Luxury ADRs as they face market share erosion in the entry-level segment. Ultra-wealthy consumers are less price-sensitive, so top-line revenue for these firms may remain robust despite lower volume.

"I'm looking at, for instance, LVMH, Moet Hennessy in Europe, climbing on the news, up 4.4%... companies that rely on exports to the U.S. also benefiting." The ruling specifically removes threats on "French wine" and other foreign goods. European luxury and beverage companies regain price competitiveness in the US market without the artificial tax wedge. LONG European Exporters, specifically Luxury and Spirits. Retaliatory measures from the US administration using different legal frameworks (e.g., National Security grounds).

Trump recounts threatening French President Macron with a "100% tariff on all of the wine and champagne" to force compliance on drug pricing. Even if the drug deal is signed, the administration's willingness to weaponize tariffs against luxury goods creates massive uncertainty for European luxury and spirits exporters heavily exposed to the US consumer. Short European luxury/spirits conglomerates due to geopolitical tariff risk. Diplomatic resolution removes the tariff threat; US consumer demand remains inelastic despite price hikes.

Coach competes in the $500-$600 range, which is "well below what you would see if you walk down Fifth Avenue to Louis Vuitton." The consumer is trading down or becoming selective. Coach's success suggests resilience in the "aspirational" tier ($500) rather than the "true luxury" tier ($2000+). If the economy tightens, the "expressive luxury" tier may capture volume from consumers who can no longer afford LVMH price points. WATCH. Monitor for signs of consumers trading down from top-tier luxury to accessible luxury. True luxury often remains resilient during downturns due to the wealth of the core customer.

2026 is the Year of the Horse. The narrator notes that "it's easier to market the horse" for Western houses that already feature them in logos or motifs, explicitly naming "Gucci, Celine [LVMH], Longchamp and of course, Hermes [RMS]." Chinese consumers are demanding "fresher takes" and cultural authenticity, rejecting lazy marketing (e.g., just a "red handbag with a horse on it"). Brands with inherent equine DNA (Hermes, Celine) can leverage this year's zodiac animal organically, giving them a competitive edge in capturing the projected rebound in holiday spending. Long LVMH (parent of Celine) and RMS (Hermes) as the primary beneficiaries of the Year of the Horse marketing cycle. Continued "economic slowdown" in China and a structural shift where consumers are "more inclined to support domestic labels" could cap upside for Western brands.

The speaker states that "2026 is the year of the horse" and "it's easier to market the horse than last year's zodiac animal... Western luxury houses already feature them... like Gucci, Celine [LVMH], Longchamp and of course, Hermes [RMS]." Brands with inherent equestrian branding (Hermes, Celine via LVMH) have a distinct competitive advantage in 2026 marketing campaigns. This allows them to authentically connect with Chinese consumers and capture the projected market rebound more effectively than competitors who must manufacture a connection to the zodiac animal. LONG these specific luxury houses as they are best positioned to capitalize on the Lunar New Year spending catalyst. Continued macroeconomic weakness in China (housing crisis, unemployment) and a structural shift in consumer preference toward domestic Chinese brands.

De Vecchi observes that while traditional Milanese are reserved ("drive a Fiat 500, not a Ferrari"), the influx of wealthy foreigners is "sometimes flashy" and prone to showing off. The demographic shift from understated local wealth to ostentatious expat wealth creates a new, high-velocity local market for luxury goods. The "flashy" new residents are the exact target demographic for Ferrari and high-end fashion houses. LONG. Milan's transformation into a cosmopolitan "playground" directly benefits luxury conglomerates. Local backlash against gentrification or "flashy" displays of wealth leading to regulatory crackdowns.

Milan is attracting wealthy expats due to a flat tax regime and the 2026 Winter Olympics. Real estate is up 38%. Financial firms like Goldman Sachs and Citi (implied via "financial institutions have expanded") are moving personnel there. The influx of high-net-worth individuals drives consumption of luxury goods and high-end services. Ferrari (RACE) and LVMH benefit from the concentration of wealth in Europe. Global banks (GS/C) benefit from the M&A boom and wealth management needs in the region. LONG beneficiaries of the "Milan Boom" (Luxury and Global Banks). Reversal of the Italian flat tax regime in upcoming elections.

Mecum sold $460 million in cars in January. The CEO states that for "monumentally significant" cars, payment was received "pretty much immediately," indicating ample liquidity among buyers. The "Wealth Effect" is clearly active. If high-net-worth individuals are deploying hundreds of millions into vintage cars with immediate cash settlement, the consumer at the very top of the pyramid is healthy. This spending power spills over into other heritage luxury goods (handbags, watches, fashion). LONG. Bullish signal for top-tier luxury conglomerates catering to the ultra-wealthy. Wealth taxes or significant changes in capital gains tax structures could dampen demand for luxury collectibles.

"Why it [Hermès] stands out versus its peers, its premium valuation is because that helps it absolutely to not only manage margin but to grow margins." The analyst explicitly differentiates Hermès from "its peers," citing its unique vertical integration and pricing power as reasons for its premium. By inference, peers (like LVMH) who are less vertically integrated or have less pricing power on "aspirational" luxury goods are more vulnerable to the "global tariff environment" and margin compression. AVOID. Prefer Hermès (RMS) over broad luxury peers (LVMH) as a quality flight. A broad recovery in Chinese consumer demand could lift the entire sector, causing LVMH (which has higher beta) to outperform defensive plays like Hermès.

Hermes sales grew 10% with 5-6% price hikes, while peers struggle. In a tough consumer environment, "Ultra-Luxury" (Heritage/Scarcity) diverges from "Aspirational Luxury." High-net-worth spending remains resilient, and heritage brands have pricing power that protects margins against inflation/tariffs. Long top-tier Luxury (Hermes/LVMH) vs. mid-tier. China slowdown impacting luxury demand.

"The K-shaped economy is certainly impacting the travel vertical... Luxury was a real highlight." Capuano confirms that the top 10% of consumers are insulated from macro headwinds. If Marriott's luxury tier is up 6% while general US RevPAR is down/flat, this strength likely correlates to other high-end travel and luxury goods exposure. This reads positively for Hyatt (higher luxury mix) and luxury conglomerates like LVMH. Long the "High-End Consumer" basket via luxury hospitality and goods. Wealth effect reversal if asset prices (stocks/housing) decline significantly.