Live Markets: Luxury sentiment makes peace with slower growth

LVMH Moet Hennessy Louis Vuitton SE

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LUXURY SENTIMENT MAKES PEACE WITH SLOWER GROWTH
Barclays has met with over 100 luxury investors since relaunching sector coverage in May, and says sentiment has settled around a lower-growth outlook, with debate now shifting to potential risks.
There appears to be broad agreement with the UK bank's framework of modest expansion. Expectations centre on roughly 3% growth in 2026, improving to 4% in 2027 to 2029 and averaging 2.5% over the long term.
Against this backdrop, investors are weighing potential downside from Chinese consumers against possible upside from spending repatriation in the Middle East, alongside continued strength in South Korea.
Competition is also back in focus, particularly with signs of renewed momentum at Chanel, while the sustainability of strong growth in the US and in jewellery is also debated.
Stock-specific views remain mixed.
Barclays notes that Hermes HRMS.PA is the most polarising stock in its coverage, with bulls pointing to resilient brand strength and bears highlighting softer trends outside leather goods and rising competition at the top end.
By contrast, LVMH LVMH.PA remains treated as a sector proxy, with increasing attention on turnaround potential at Dior and Tiffany. Richemont CFR.S is seen as a consensus long, while Kering PRTP.PA remains a "show-me" story as investors look for clearer signs of stabilisation at Gucci.
More on luxury here: Luxury buyers see no pickup in demand yet
(Danilo Masoni)
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