** Deutsche Bank sees 2021 as a year of sharp luxury demand
recovery but remains cautious on the sector as it is "priced for
perfection"
    ** Despite 2021 starting on a soft note, the broker expects
demand to surge 18.3% for the year and drive an average 95% EBIT
rebound
     ** It adds though it sees margins level to be below 2019
for most companies
    ** DB ups 2021 earnings estimates for companies in its
coverage universe on average by 4%, adding that the rerating
that occurred in 2020 suggests that the recovery is largely
priced in
    ** It agrees with the overall consensus that luxury
businesses represent a high quality asset, but remains very
selective as it find valuations complacent with no
acknowledgement for risks
    ** For Q4, DB sees a 3% estimated foreign exchange (FX)
average decline in sales for its universe, with Swiss Richemont
 CFR.S  as well as "hold"-rated Italian Brunello Cucinelli
 BCU.MI  and Moncler  MONC.MI , French Hermes  HRMS.PA  and
EssilorLuxottica  ESLX.PA  as the notable outperformers with
positive expected sales growth
    ** It ups Richemont  CFR.S  to "buy", saying it believes the
group's solid fundamentals are for now coupling with better
earnings momentum, and an interesting valuation angle 

 ((kate.entringer@thomsonreuters.com))