On Wednesday, Morgan Stanley raised its target price for LVMH (LVMHF) shares to €850 from €790, while maintaining an equal-weight rating. The adjustment came as the bank updated its forecast for the luxury goods company’s first-quarter sales growth expectations. The bank’s analysts said the company’s shares are “probably risk-free.”
LVMH group organic sales growth (OSG) estimates for the first quarter of 2024 have been revised upward to 4.5% from 2.9%, beating the consensus value added (VA) forecast of 3.5%. The revision is primarily driven by a more optimistic outlook for LVMH’s Fashion & Leather Goods division, which includes renowned brands such as Louis Vuitton, Dior, Celine and Fendi. Morgan Stanley now expects sales in the division to increase slightly, having previously forecast a slight year-over-year decline in the first quarter of 2024.
The bank’s revised forecast assumes a less significant impact from Western consumer spending compared to the fourth quarter of 2023. Organic sales growth of 2% year-on-year in the first quarter reduces risks to LVMH’s investment case.
Investors and analysts will be eagerly awaiting LVMH’s upcoming quarterly sales report to gauge the accuracy of these forecasts. LVMH is expected to release sales data for the first quarter of 2024 in April, likely on Tuesday, April 11, after the Paris market closes. This report will provide additional information about the company’s operations and the state of the luxury goods market as a whole.