Do you know Elon Musk, the guy whose decision to replace the blue bird with a Shiba Inu, by the way, triggered a 30% rise of Dogecoin? Forget about him. Our new icon and the wealthiest person in the world is Bernard Arnault, the founder and CEO of Louis Vuitton Moët Hennessy (or just LVMH). His fortune has been growing along with the LVMH stock price – so, maybe it’s a good idea to buy those shares and overtake Musk (or, at the least, make some profit)?
We all know those videos where two incredibly beautiful people start kissing while riding up in an elevator. Just when it seems like a popup is about to appear demanding an age verification, it turns out you're watching an ad for a luxury perfume. And, most likely, this is the perfume of one of the brands owned by LVMH.
Bernard Arnault’s company includes various well-known and expensive brands managed under six branches: Fashion Group, Wines and Spirits, Perfumes and Cosmetics, Watches and Jewelry, Selective Distribution, and Other Activities. LVMH manages 75 prestigious brands. These include Tiffany & Co., Christian Dior, Fendi, Givenchy, Marc Jacobs, Stella McCartney, Loewe, Loro Piana, Kenzo, Celine and lots of other lavish names, which are now a part of the cultural legacy (no matter how pompously it sounds).
But we are connoisseurs of another art, the art of figures. It's not the brands that matter to us, it's the charts. In the last five years, they have gained 215%. Also, if you want to profit from various market movements, you can use special trading tools. For example, the economic calendar will help you mark all major economic events and react to them in time.
LVMH felt the impact of the Covid-19 pandemic, because fancy dress is not so appropriate when you are sitting at home. But the stock quickly recovered and then continued its rise – resulting in its high to date.
The rise at the beginning of 2023 happened after the announcement of the buyback program. It increased the market cap of LVMH and naturally made Bernard Arnault the wealthiest man in the world.
Moreover, despite all the problems, we now live in the post-pandemic time. Restrictions and masks have disappeared, people are traveling the world again, and even China eased off its policy and let tourists in. The sum of all these factors tells us one thing – more potential customers and profit for LVMH’s brands.
A logical counterargument can be made here – there is a crisis, complicated geopolitical situation in the world and a more than likely recession. If the market falls, it leaves no one behind, including LVMH. But, in general, the company will probably face less disruption than many others in such case. Its customers are people with high or at least above-average income. Even in a crisis, they still have enough money to buy a new Fendi coat.
The final important point, whether LVMH is a great enough company to add its stock to its portfolio at historically high level. The average analyst rating for LVMH is a "Strong Buy”. And the consensus forecast is +8% over the next 12 months.
Of course, the “Strong Buy” mark doesn’t mean that you have to purchase these shares right now. You should make a decision only after you carry out your own analysis.
