Citi: Buy LVMH On Louis Vuitton's Brand Momentum

Citi bank resumed coverage of LVMH Moet Hennessy Louis Vuitton SA Unsponsored ADR (OTC: LVMUY) Tuesday with a bullish stance. 

The Analyst 

Thomas Chauvet resumed coverage of LVMH with a Buy rating and raised the price target from 315 euros ($353.38) to 392 euros ($439.77). 

The Thesis

With Louis Vuitton and Dior’s popularity intarecenct, Chauvet said in a Tuesday note that sales momentum is likely to continue this year for LVMH. (See his track record here.) 

The luxury good sector is undergoing a resurgence, with LVMH, Kering and Montcler all outperforming year-to-date, the analyst said.

The company recently purchased the luxury hotel group Belmond, a move Chauvet said will give LVMH a first-mover advantage to capture the expected rise in experiential luxury demand.

With China accounting for 20-25 percent of group sales and roughly 30 percent of Louis Vuitton’s sales, “the health of the Chinese consumer is key to the LVMH investment case. We remain very positive, on the back of recent data," the analyst said. 

Chauvet estimates LVMH will deliver an attractive three-year CAGR of 9 percent, 10 percent and 11 percent on sales, EBIT and EPS respectively.Price Action

LVMH Moet Hennessy Louis Vuitton OTC shares were up 1.65 percent at $78.67 at the time of publication Tuesday.  

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