0hau3 Dec 2012 23:22
Goldman Sachs has upgraded its rating for French luxury firm LVMH to 'buy' from 'neutral', explaining that the stock has underperformed the rest of the sector by 20 per cent, thus creating a good entry opportunity.
Analysts at the US bank also raised the stock's price target to €197 from €184.90.
They believe that organic margin opportunities and positive cash flow for top LVMH brands should produce long-last results and a better performance in the stock market.
Higher margins are particularly expected in the Wine & Liquors and Watches & Jewelry businesses.
On the other hand, LVMH faces the risk of moderation in the dynamics of the Louis Vuitton brand and a slowdown in global demand for luxury products, Goldman Sachs explains.