The last week has witnessed overall a pause in the luxury stocks rally, pretty much in line with what happened overall with European and US equity markets. Stocks have been overall stable but with a modicum of additional volatility.
In this scenario several luxury stocks behaved as we predicted, as investors preference steered toward a specific subset of companies. Particularly those groups capable of providing investors with robust earnings and growth prospects, juicy enough to justify multiples that are often quite high.
Moncler case appear emblematic: the Milan based companies last week put out the final figures for 2018. During those 12 months revenues spiked 19% while profits posted 33% growth, on top of that investors can count on an excellent guidance for 2019.
The week was also positive for high-end ca manufacturers, with the notable exception of Tesla which is plagued by company-specific issues. This is a good sign: investors remain focused on stocks and sector rotation while warming up to a recently beleaguered niche of the global economy.
The doom and gloom haunting the luxury car segment is fading as the fears of the inception of a new round of global recession are receding. It is not a secret that this sector is probably the most sensitive and correlated to China. The explosive performance currently displayed by Chinese stocks, based on renewed optimism about a possible trade deal with the US, offers lots of lifeblood to luxury auto stocks.
Impressive was also the performance of French luxury Big 3 (LVMH, Kering, Hermes) which are buoyed by both general and company-specific positives. Among the former the performance of French stocks has been in general very good and well-above the European average. Among the latter wee cannot forget how these corporate giants boast strong balance sheets and a solid portfolio of brands, exactly what investors long for in the current scenario.
|Estee Lauder||22.03%||New York|
|Ralph Lauren||23.76%||New York|
|Capri/Michael Kors||19.00%||New York|