Latest news with #ErwanRambourg
Business of Fashion
3 days ago
- Business
- Business of Fashion
This Week: What's Ailing Louis Vuitton?
What's Happening: The luxury downturn is deepening, with sector bellwether LVMH expected to report a double-digit decline in its fashion and leather goods division when the group reports quarterly sales and first-half profits July 24. Is Bigger Still Better? In previous slowdowns like the 2008 financial crisis or Covid-19 pandemic, LVMH's staggering scale and exposure across competing categories helped it hold up better and bounce back more quickly than rivals. This time, jewellery-focused Richemont, standalone giant Hermès and smaller groups like Prada, Moncler, Zegna and Brunello Cucinelli have proved more resilient while LVMH's woes deepened. Unjustified price hikes — or 'greedflation' — in the group's key handbag category is largely to blame. The group is also navigating a generational shift in its top ranks. LVMH's marketing budgets and clout with landlords remain unparalleled. But in today's fast-changing luxury market, more focused companies appear to have the advantage when it comes to nimble decision-making and execution. The coming quarters will show whether the conglomerate's current down cycle represents a blip or a paradigm shift. Vuitton Under the Microscope: LVMH is facing challenges across key units — from layoffs at Moët Hennessey to falling sales at Dior to lacklustre performance at duty-free retailer DFS. But with a designer transition underway at Dior and new management in place at Moët, those works-in-progress are increasingly seen by investors as yesterday's story. Reviving momentum at Louis Vuitton, the group's biggest and most profitable brand, is now top of mind. 'The biggest luxury brand on the planet and more than half of the group's EBIT seems to be at a crossroads,' HSBC analyst Erwan Rambourg wrote last month in a note to clients. 'The aspirational skew of the brand is unhelpful currently. A schizophrenic pull between low-end (chocolate, beauty) and high-end (exclusive leather ranges), fashion content (Murakami) and more subtle travel-related luxury items begs the question: What does LV really stand for? Who is it targeting? What is its USP?' The creation of a new deputy CEO position (bringing over former Loro Piana chief Damien Bertrand in March to support chief executive Pietro Beccari) was a 'red flag' signalling challenges at the brand, Rambourg said. Balancing a variety of messages including hyper-visibility and sophistication, top-end and aspirational price points, core products and brand extensions has long been a part of the mega-brand formula. But another quarter of losing market share to the likes of Hermès and Prada — as analysts are currently forecasting — will lead investors to wonder: What's the plan? The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders' documentation guaranteeing BoF's complete editorial independence.
CNBC
27-06-2025
- Business
- CNBC
HSBC upgrades Nike shares after earnings beat, says inflection is 'finally here'
Nike is poised to see even more gains following its better-than-expected results for the fiscal fourth quarter, HSBC said on Friday. The firm upgraded the sneaker giant to buy from hold, marking its first buy rating on the stock in three and a half years. It also raised its price target on the name by $20 to $80, which implies about 28% upside from Thursday's close. This comes as shares surged more than 9% in the premarket Friday after Nike beat analyst expectations on the top and bottom lines. While the company said that President Donald Trump's tariffs are anticipated to cost it $1 billion prior to price hikes, it also said it expects to see profits and sales declines moderating in the future. "Long in the making but we think the inflection is finally here," analyst Erwan Rambourg wrote in a Friday note to clients. "We think there is more than tangible evidence that Nike has a path to see its sales rebound in the not-too-distant future, and its margins to be repaired, and this despite an unfavorable tariff headwind which the group believes could weigh for 75 [basis points] on gross margin in FY May 2026." Along with seeing better sales momentum and gross margin pressures easing later in the year, the analyst pointed to management "not cutting corners and is committed to quality." On that front, he said that the repositioning of Nike's digital business as one that's full price could be beneficial for the company in the long term. When it comes to the company's growth trajectory, however, he thinks investors should not expect a V-shaped recovery but rather a swoosh similar to the company's logo. "Management was clear on the fact that there is no easy fix and that a combination of clearance, soft China and tariff hit will make Q1 ending August somewhat tricky with sales and margins down," he wrote. "Tariff mitigating factors will also ramp up gradually." With his call, Rambourg joined 18 other analysts with a strong buy or buy rating on Nike, per LSEG. By contrast, 20 analysts out of the 41 total that are covering it have a neutral view of the stock with a hold rating. Other analysts also held an optimistic view of Nike following its latest quarterly results. Goldman Sachs, which also has a buy rating on the stock, said the company is "approaching trough earnings," adding that it's "early in its transformation journey." Additionally, Bernstein, which has an outperform rating on the retailer, similarly said it expects a "gradual recovery." This year, the stock has fallen more than 17%, underperforming the S & P 500's more than 4% in the period.
Business Insider
22-06-2025
- Business
- Business Insider
HSBC Keeps Their Buy Rating on Hermes International (HESAF)
In a report released yesterday, Erwan Rambourg from HSBC maintained a Buy rating on Hermes International (HESAF – Research Report), with a price target of €2,900.00. The company's shares closed yesterday at $2,603.60. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Rambourg covers the Consumer Cyclical sector, focusing on stocks such as LVMH Moet Hennessy Louis Vuitton, Burberry, and Hermes International. According to TipRanks, Rambourg has an average return of 8.1% and a 58.04% success rate on recommended stocks. In addition to HSBC, Hermes International also received a Buy from Berenberg Bank's Nick Anderson CFA in a report issued on June 19. However, on June 18, J.P. Morgan maintained a Hold rating on Hermes International (Other OTC: HESAF).
Business Insider
01-06-2025
- Business
- Business Insider
LVMH Moet Hennessy Louis Vuitton (0HAU) Gets a Hold from Jefferies
In a report released yesterday, James Grzinic from Jefferies maintained a Hold rating on LVMH Moet Hennessy Louis Vuitton (0HAU – Research Report), with a price target of €460.00. Confident Investing Starts Here: Grzinic covers the Consumer Cyclical sector, focusing on stocks such as Compagnie Financiere Richemont SA, Ferrari, and adidas AG. According to TipRanks, Grzinic has an average return of 4.7% and a 59.63% success rate on recommended stocks. In addition to Jefferies, LVMH Moet Hennessy Louis Vuitton also received a Hold from HSBC's Erwan Rambourg in a report issued on May 27. However, on the same day, Bernstein maintained a Buy rating on LVMH Moet Hennessy Louis Vuitton (LSE: 0HAU).
Business of Fashion
16-05-2025
- Business
- Business of Fashion
LVMH Shares Have Lost Their Lustre
After being a boon to the Paris equity market for years, LVMH stock is now its biggest drag. France's benchmark CAC 40 index is trailing the regional Stoxx 600 gauge by about 9 percentage points over the past year and has also underperformed during the current five-week market rebound. LVMH has fallen by a third in that time, accounting on its own for more than 70 percent of the CAC's relatively poor performance. The luxury giant's stock valuation languishes at the bottom of a five-year range, but that still hasn't proved enough of a markdown to lure back investors. Europe's top luxury stocks were once viewed as an answer to Wall Street's 'Magnificent Seven' tech megacaps. But LVMH Moet Hennessy Louis Vuitton SE and some of its peers have been battered by a slump in spending by wealthy Chinese shoppers, deterred by the faltering economy. The industry's outlook has grown even gloomier in the face of US President Donald Trump's tariffs on imports from the European Union. ADVERTISEMENT 'There is no luxury sector, just stories,' said HSBC Holdings Plc consumer analysts led by Erwan Rambourg. 'As investors ask whether it's time to support luxury or not, we think more and more that the sector is characterized by dispersion.' There are weak, dull, and good stories among the the sector, the HSBC team added. A lot of the shine has come off LVMH, the world's largest luxury group by sales. It's no longer the most valuable company in Europe — or even in France. Rival Hermès International SCA now has a larger market cap and trades on multiples that are 2.5 times higher. 'Lower valuations levels act more as a floor than a ramp for a rebound, which would necessitate more visibility on growth,' said Raphael Thuin, head of capital markets strategies at Tikehau Capital. LVMH didn't immediately respond to a request for comment. For the first time, the market seems to be applying some form of conglomerate discount to LMVH, with its highly luxury businesses. And its share-price decline has pulled LVMH into a tussle with Schneider Electric SE for the crown of the CAC 40's most influential stock. LVMH's weight in the index has fallen to 7.2 percent from 10.5 percent just a year ago. 'There's much more prudence regarding the stock, which is underperforming both its index and sector,' according to Ariane Hayate, a fund manager at Edmond de Rothschild Asset Management. LVMH 'needs momentum for key brands like Dior to bounce back and it's not the case yet,' she said. A tentative rebound has materialized for luxury stocks of late. Progress in trade talks, with the US administration easing its stance on tariffs, as well as fiscal stimulus in China, are tailwinds for the depressed sector. Strategists at Barclays Plc even raised the group to overweight this week. But for all that, investors seem more keen to invest in self-help stories such as Burberry, rather than to restore broader exposure. This morning, Richemont SA posted a rise in full-year sales, demonstrating its greater resilience than rivals like LVMH in the softening market. ADVERTISEMENT Analysts at Morgan Stanley on Friday lowered their LVMH earnings and sales estimates, and cut their target price on the shares. They highlighted adverse currency developments with the strength of the euro, the 10 percent US tariffs, as well as worsening trading trends in the sector, while keeping an equal-weight rating on the stock. 'In a nutshell, LVMH, like the rest of the industry, is now facing adverse demand from the three main nationalities at the same time — Chinese, Americans and Europeans, combined 75% of industry spend,' the Morgan Stanley team wrote. And LVMH's share-price drop doesn't seem directly linked to the political turmoil triggered by President Emmanuel Macron when he shocked markets by calling snap parliamentary elections last summer. Over the past year, bank stocks have done well and there are more positive movers in the CAC than losers. Even in luxury, Hermès has posted strong gains, while in the extended consumer sector, EssilorLuxottica SA and L'Oréal SA have flourished. 'There's no political risk there in action and you can see that through the high performance of the French banking sector,' said Kevin Thozet, a member of the investment committee at Carmignac. 'We have invested in LVMH in the past, it's a great company, we'll most certainly invest in them in the future at some point, but at the moment we're really focussed on the very high end of the industry. We hold Hermès and Ferrari.' By Michael Msika and Julien Ponthus Learn more: LVMH Sales Miss Expectations First-quarter fashion and leather goods sales fell 5 percent for the luxury giant, whose brands include Louis Vuitton and Dior.
