A new luxury era - the future dynamics of the luxury market

• Autor(a) principal: Teixeira, Maria Cima Sobral Roquette
• Data de Publicação: 2021
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/145365
• topic: Valuation; Finance; E-commerce; Lvmh; Luxury market; Fashion & leather goods; Market leader; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

LVMH has undoubtedly a leading position in the Luxury Market with a representation of 14% of the whole market. It is also the highest luxury conglomerate operating in five main business segments: luxury and leather goods, watches and jewelry, perfumes and cosmetics, wines and spirits ,and selective retailing. The group definitely benefits from competitive positioning through their strategic alliances, joint ventures, and M&A which are generated of value and will continue to impulse their market share growth. In addition to this, there are new drivers arising such as the importance of Asia as a market, the leading position of the US as a key location, the impulse in the online channel, and finally the high penetration in the new generations in this market. Also, the economic outlook of the following years with low-interest rates, low unemployment rates, and a higher HNWI segment will confirm the wealth growth and therefore leverage LVMH performance. With this being said, we strongly believe that LVMH will continue to be a leader in this market as so our target price is 767€. Our recommendation is to hold the stock.