2022/09/14 (069) Technical Analysis

Noble Profitable Trademarks Survive;
Otherwise They Wouldn`t Be
– Even Like LVMH

Everyone has problems, always criticizing something, looking for and finding some reason to feel in crisis again! Like you’re from Pandora’s box; born with a lack of maternal love? And then still feel challenged when someone else feels absolutely the opposite way. And not just feel? Rather it is! A noble business man; like LVMH. Which is why I would like to present this French premium brand to you today in these uncertain times, with high inflation and Russia’s war of aggression against Ukraine. Because LVMH’s business is still booming. Which is why I think that if everything calms down a bit in 2023 and or possibly also in 2024, in retrospect it should have been worth it again to have been with this noble luxury brand.

The other day, a close confidant said derogatory to me that meanwhile, with my D2D, I’ve also developed into something of a snob brand. But in a pejorative tone. Which admittedly hurt me a bit; since we seemed to have known each other for decades; I thought at least. But with verbal, emotional class fighters who have a problem with profitable fellow human beings – regardless of whether from top to bottom, and or but also bottom to top. Let alone from left to right, and or even from right to left, I don’t want to and can’t do anything. Back then. And today, after taking his words to heart; which admittedly really hurts; even less. Apple in the smartphone industry. And Porsche in the car industry are also comparisons, with 2 other noble profitable businessmen. But let’s get back to LVMH, which is developing robustly. And that’s the way it should be! How different? In recent months, retail has generally declined and the prospects until the end of 2022 continue to cloud over. This is always the case in weak economic phases. But LVMH seems to be a shining example in currently more than devastated retail.

LVMH Is In A Different League

The company mainly appeals to a target group whose purchasing power is high even during an economic crisis. Of course, I don’t mean customers who are very unlikely to buy luxury items just once. I’m talking about the regular clientele, for whom LVMH’s luxury brands are part of everyday life, like shopping in a supermarket is for any of us. Which is why these regular customers of LVMH are also feeling the effects of a recession in their wallets. But which, precisely because of the existing assets, does not hurt in comparison to the majority. That’s why LVMH is a luxury brand. And what has more value usually costs more. Just like the LVMH share. So the likelihood that LVMH customers will have to severely restrict their usual luxurious lifestyle is significantly lower than that of the majority of the population. To which I also count myself! Not that we misunderstand each other? Without wanting to position myself as a class warrior again. Because the current figures from LVMH clearly show that.

LVMH Is Also Increasing Its Own Margins

Purchase prices and thus production costs have also increased for LVMH. Which is why US inflation, US producer prices, US retail sales, and/or the US trade balance are generally given a lot of attention this week. In order to get a feel for how things will continue in the future with the global economy, in other words the US economy. And that’s why I just formulated a long 4XSetUps for us. And that’s because LVMH hasn’t had any problems passing on the increased costs to its end consumers. Which is why profits grew strongly in the first half of the year. Operating profit increased by 33.4%. The growth here was even stronger than on the sales side. The operating margin thus increased to 27.9%.

LVMH Doesn’t Need To Hide Its Numbers

The development in the luxury segment is growing and growing – and LVMH is right in the middle of it. The figures that LVMH published for the second quarter and the first half of 2022 showed this in black and white. In the first half of the year, a sales increase of 28% was achieved. This is an excellent result, especially since growth was not slowed down by the recent corona measures in China, the war in Ukraine or the weakening global economy.

The analyst firm Jefferies has raised the price target for LVMH from EUR 700 to EUR 740 and left the rating at “Buy”.
„The luxury goods group is uniquely well equipped to navigate the fluctuations in the sector, especially in Europe“, wrote analyst Flavio Cereda in a study available on last Thursday. The expert raised his estimates, according to which the company should grow by one and a half times the sector growth in 2024. Since the share is also rated less demanding, it is an important investment that investors should buy in the current times.

Although LVMH – like most western companies – withdrew from its previous business in Russia, the loss associated with this was excellently compensated for by strong growth in other regions. Revenue rose 27% in the second quarter, nearly the same rate as the first three months of 2022. Organic revenue growth was 19%. While business in Asia increased moderately, revenues in Europe and the USA increased significantly. How is it that LVMH is able to generate such strong growth in the current market phase when the rest of the retail trade is groaning? I speak from personal experience, my dear readers. You know, that as I startedpublishing this DEVISE 2 DAY Affiliate Financial Market Online Newspaper, since February 2022, I’ve been working in a supermarket myself; until the end of July`22. I know what i`m writing about.