The luxury giant LVMH managed by the CEO Bernard Arnault has now officially become the first European group listed on the stock exchange to present a market capitalisation more than 500 billion dollars.
The holding company, which owns the brands Louis Vuitton, Moët & Chandon e Hennessyas well as other brands Givenchy, Bulgari e Sephorahas passed the major milestone following the stock’s big run, which has rallied by +32.9% since the start of 2023.
An assist to the LVMH quotations had already arrived at the beginning of Aprilin the wake of
publication of sales data, which had highlighted a 17% increase, more than double the expectations of analysts.
LVMH shares rallied further in today’s session, jumping to a new all-time high.
The leap has brought the market value of the group led by Arnault to exceed $500 billion.
LVMH: driving force behind China’s reopening
It is worth mentioning that the Paris-based giant had already reported record results for the whole of 2022, with a turnover of 79.2 billion euros and profits related to recurring operations equal to 21.1 billion.
For LVMH, it was the second consecutive year of record accounts.
The fashion house explained the excellent results with the reopening of the Chinese economy from the period of lockdown from Covid-19, which the Beijing government kept in force until the end of 2022 and, also, with the return of the travel boom, which brought back to its stores buyers from all over the world, belonging to the high in income.
It must be said that the bets on the effects of China’s reopening on the economy and in particular on the sales of the luxury giants have contributed to the stocks of other fashion houses, such as those of Richemont, Kering e Burberry.
LVMH: Arnault’s colossus exceeds $500 billion on the stock exchange
And Financial Times article sums up the goal collected by the title of the group.
In the early hours of today’s session, LVMH shares rose by 0.3%compared to the closing value of last Friday, settling at 903.7 euros.
The uptick caused the market capitalization to grow to 454 billion euros, the equivalent of 500.3 billion dollars, against a euro-dollar exchange rate of $1.1019.
According to Bloomberg surveys, the trend has allowed LVMH to become the first European company to surpass the threshold of market value of 500 billion dollars.
Looking at Europe’s benchmark stock index Stoxx 600, among other things, it emerges that the groups that occupy the second and third place in the ranking of the largest capitalized companies in Europe show decidedly lower figures.
The two groups are Nestle and Novo Nordiskwhich respectively have market values equal to €326 billion and €272 billion.
LVMH, in addition to being led by him, is also controlled by billionaire Bernard Arnault.
The Financial Times also recalled that, from the beginning of 2023, the benchmark share price of the Paris stock exchange, he CAC 40, it collected a 17% increase, also benefiting from the rush of investors to position themselves on luxury stocks.
LVMH, with its 32.9% YTD gain, it also beat the Paris stock exchange.
Other titles of fashion houses active in the French luxury and beauty sector also did better than the Paris stock exchange.
He titolo L’Oreal rose 31.1% over the same period, while shares of Hermès, known for its iconic Birkin bag, jumped 39.4%.
Arnault is the richest man in the world, surpassing Bezos and Musk
As Gabriel Debach, market analyst at eTorocommented on the new records set by the French giant LVMH:
“With a growth of total return over the last 5 years of approximately 242%behind only Hermès, and with revenues for the first quarter of 2023 up 16.8%, LVMH shares set a new record, becoming the eleventh largest company in the world and the first European company to surpass the threshold of 500 billion dollars”.
Debach recalls that “we are still a long way from American values, with Apple leads the ranking with its 2.6 trillion dollars (with its maximum peak of 2.94 trillion in December 2021), but the data show a similar forward P/E ratio: both around 26x (26.7x for Apple and 26.6x for LVMH), with the French stock which in the past has scored even higher values. Therefore, strong growth is still expected for the French fashion giant”.
The eToro analyst explains that “geographical diversification plays in favor of the luxury title”which is “benefiting from the Chinese reopening as well as from the greater Japanese demand, so much so that the European and American markets together represent only slightly less than half of the total turnover (about 49.3%)”.
In particular, for LVMH, the “Chinese reopening reports increased prospects from management, with double-digit first quarter momentum boding well for performance over the year.
“In fact – concludes Gabriel Debach – fashion surpasses US techshowing greater resilience to inflationary fears and even the economic slowdown”.
The result in the world ranking of the Scrooge McDuck of the world is visible:
“Current valuations – indicates the market analyst of eToro – pay off Arnault Bernard the richest man in the worldaccording to the Forbes ranking, with its approximately $243 billion of assets, followed by the owner of Tesla, Elon Musk ($175 billion) and Jeff Bezos ($130 billion)”.