RBC Capital Markets downgraded its rating on LVMH from Outperform to Sector Perform and revised its 12-month price target to €475. It also cut its EPS and revenue forecasts amid sluggish demand for luxury goods.
RBC sharply downgraded its rating on LVMH Moët Hennessy Louis Vuitton from Outperform to Sector Perform and cut its 12-month price target to €475. The changes reflect its view that macroeconomic conditions will constrain high-end consumer spending worldwide.
RBC said the conflict in the Middle East, higher oil prices and continued monetary tightening would weigh on demand for luxury goods. It cut its 2027 EPS forecast to €23.03 and revised its revenue forecast down, putting both below market consensus. EPS forecasts for 2026 and 2028 were also reduced.
By region, the United States and Japan are expected to drive growth, while Europe, Asia-Pacific and China are forecast to remain flat to trend lower. Fashion and leather goods are the core of the group’s earnings, and RBC said slowing growth in the division would weigh on overall profitability.
The 3Q results are viewed as an important test. Total revenue for the period is forecast at €18.3 billion, with organic growth of 1%. By division, Watches and Jewelry is expected to grow, while Fashion and Leather Goods and Wines and Spirits are forecast to decline.
The long-term outlook is also cautious, with EPS growth through 2030 forecast to slow to 9%. The dividend forecast was also cut to €13. RBC identified a delayed recovery and the efficiency of capital allocation as risk factors.