Largest capitalization of the CAC 40, this luxury giant should return this year to a more normative growth trajectory with the rise of vaccines and the integration of Tiffany. Very expensive, the title is essential in the selections and its valuation premium reflects a portfolio of unique brands. Stability gives hope for a gain of 33% in a short time. But for a high risk profile.
Our last strategy based on stability on LVMH recommended on this site on November 10 proved to be a failure since the action of the world luxury giant crossed the upper limit of 510 euros of the certificate issued by Société Générale (code: LU2088612556) before it expires on January 15. It has therefore lost all of its value. Despite everything, we renew our advice by choosing a stability with a much more ambitious upper limit located at 580 euros that the action should not reach in our opinion by the product maturity date set for March 19, 2021. Our opinion remains very positive on LVMH called upon to unveil its annual accounts at the end of the month. Since the second half of the year, the fashion and leather goods division, both the most important and the most profitable, and China have resumed strong growth and the rise of vaccines during the first part of this year should facilitate the return to a more normative growth trajectory. There is also the integration of American jeweler Tiffany, which comes at the opportune time of the recovery of the luxury market and which will strengthen the exposure of Bernard Arnault’s group to the fine jewelry segment and to the American market. So 36.2 and 31.3 times the estimated profits for this year and 2022 (against an average ratio of 20.6 times over the period 2009-2019), the title is very expensive but remains essential in portfolios, if not- This is because of its rank of first market capitalization of the CAC 40 index which requires all bullish stock marketers to hold it. Then the premium reflects a portfolio of unique brands.
Reimbursed under conditions at 10 euros
The chosen stability is therefore issued by Société Générale with a deadline of March 19, 2021 and two terminals located at 430 euros for the lowest and 580 euros for the highest. Remember the principle of the certificate: it will be reimbursed 10 euros at maturity provided that the LVMH share evolves by then within the zone defined by the two limits. Given its buy price, it is likely to generate a 33.5% gain in just over two months. But watch out for its risk profile. As mentioned above with the stability recommended on November 10, the certificate may lose all of its value in the event of exit from the top or the bottom of the fluctuation corridor framed by the two limits.
Our advice: buy an LVMH stability issued by Société Générale (code: LU2088856260); deadline: March 19, 2021; terminals: 430/580 euros; price: 7.49 euros; portion: 1.