Live Markets: Luxury demand stabilises, but September test looms

LVMH Moet Hennessy Louis Vuitton SE

06/08/2026 11:56

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LUXURY DEMAND STABILISES, BUT SEPTEMBER TEST LOOMS
Luxury is among the strongest gainers in Europe today, cementing a 15% recovery .STXLUXP from May lows as hopes of progress to ending the U.S.-Iran conflict boosted sentiment in a sector highly exposed to tourism flows and consumer confidence.
The upbeat market mood comes as UBS wraps up its assessment of the earnings season, saying the long-awaited pick up in luxury demand remains on track after over 2 years of downgrades.
Average organic sales growth in the sector accelerated to 6% in Q2 from 4% in Q1, the Swiss bank notes, with seven out of 14 beating sales expectations and eight out of 11 topping margin forecasts.
"Results confirmed a gradual recovery in luxury demand and a stabilisation in earnings after over two years of downgrades," write UBS analysts Zuzanna Pusz and Robert Krankowski.
Still, investors do not look ready to declare victory, with the focus now shifting to September, where UBS says comparisons become tougher.
The bank believes that a lack of meaningful EPS upgrades, ongoing geopolitical uncertainty and wide divergences between winners and losers in the sector are keeping sentiment subdued.
Investor caution is also reflected in valuations. Sector multiples have fallen from post-pandemic highs, but significant differences remain. 
Among STOXX Luxury 10 members, LVMH LVMH.PA is the cheapest at roughly 20 times forward earnings, down from 36x five years ago, while Cucinelli BCU.MI stands out at 38x, still down sharply from 80x in 2021.
     
     
(Danilo Masoni)
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