LVMH

LVMH in 2026 is a conglomerate in a paradoxical position: the world's largest luxury company with 75 brands (Louis Vuitton, Dior, Tiffany, Hennessy, Moët, Sephora, Bulgari, TAG Heuer) is experiencing its first real crisis since the 2009 financial crisis. Revenue fell 4.7% in 2025 with flat margins — after 14 years of uninterrupted growth. Main reason: the Chinese affluent consumer, who in 2019 accounted for 35% of global luxury revenue, has structurally pulled back after the property crash and Xi Jinping's 'common prosperity' campaign.

The real 2026 setup, however, has two new components: First, the China bid appears to be stabilizing — Q1/2026 regional revenues showed for the first time in 8 quarters a +2.1% growth, driven by a moderate PBoC economic stimulus and recovery in the wedding business (Shanghai weddings +18% YoY). Second: Bernard Arnault publicly positioned his daughter Delphine Arnault (CEO Dior) as likely successor in February 2026 — the succession story is now taking shape.

But: 2026 brings escalating US tariff risk. Trump administration proposals in April 2026 explicitly named 'French luxury products' as a possible 25% tariff sector — which would significantly hit the US margin (28% of LVMH revenue).

LVMH is only indirectly visible in 13F filings since the stock primarily trades in Paris (Euronext) and does not appear in classic US smart-money reports. ETF holdings are informative, though: the iShares MSCI Europe ETF (IEUR) holds LVMH as its third-largest position; the Stoxx Europe 600 Luxury Index has LVMH at ~22% weighting — the highest concentration in the index.

More significant is the insider setup: Bernard Arnault holds about 48% of LVMH shares via family holding Christian Dior SE — one of the highest insider stakes among large European mega-caps. In Q4/2025, Arnault did not sell a single share — with the stock 30% drawdown since 2023, this is a strongly bullish signal to the market.

Notable Q1/2026 buyers: Capital Group raised its LVMH position by 4.2% (to 8.1M shares), BlackRock steady at 5.1%. Classic European value investors like Comgest (Paris) remain top-10 holders — their thesis: at current valuation, LVMH is a unique, irreplaceable franchise.

LVMH trades at a forward P/E of 17.45, a P/S of 3.5, and EV/EBITDA of 12.8 — all below their own 10-year medians (P/E 23, P/S 4.2, EV/EBITDA 15.5). Classically the stock is undervalued, especially compared to Hermès (49× P/E) or Brunello Cucinelli (40×). Three models: (1) Earnings power model: at 2027 EPS €33 (analyst mean) and conservative P/E of 19, fair value comes out at €627 = 39% upside. (2) Mean reversion: at P/E 23 (25-year median) and 2026 EPS of €26 = €598. (3) SOTP model: Fashion & Leather Goods alone (Louis Vuitton, Dior) at Hermès-style isolated valuation is worth €180B — vs total current market cap of €223B. The other 73 brands the investor effectively gets for free.

1. July 23, 2026: H1 2026 earnings — critical for confirmation of China stabilization and US tariff update from Bernard Arnault himself (he traditionally hosts earnings calls in person)
2. September 2026: Paris Fashion Week — Dior and Louis Vuitton shows; sales indicator for H2/2026 pipeline
3. Q4 2026: Expected Trump tariff decision — under US election reversal, tariff could be averted; under Republican sweep, direct trigger for 15-25% drawdown

LVMH is a unique asset: no other company combines 75 top-tier luxury brands, global distribution dominance (Sephora, DFS), and vertically integrated production (own vineyards, own Tiffany diamonds, own Louis Vuitton leather workshops). At a forward P/E of 17.5, the stock is historically cheap — that was last seen in 2014. My take: a long-term buy for anyone with a 5+ year view who can live with a possible further -20% drawdown (via tariff or China shocks). Compared to Hermès, LVMH is the more diversified, more robust option — Hermès has a purer brand but also a very narrow product base. For international investors, French withholding tax (12.8% after tax-treaty offset for US, 12.8% for EU) on the annual dividend of €13.40 is worth noting — still attractive at 4-5% gross yield. Position in my personal portfolio: 4% weighting.