Louis Vuitton (LVMH) has a market capitalization of more than $500 billion, becoming the first European company to reach this milestone, thanks to booming luxury sales in China and a rising euro.
This achievement comes less than two weeks after LVMH joined the ranks of the world’s top 10 companies, supported by higher first-quarter sales.
Competitor Hermes International later published its strong numbers, reinforcing the view that China’s reopening from pandemic lockdowns is fueling growth across the industry, according to Bloomberg, which was seen by Al Arabiya.net.
The company’s rise in value has swelled the wealth of the world’s richest person, Bernard Arnault, who has built LVMH into a global power through a series of acquisitions. He has a net worth of approximately $212 billion, according to the Bloomberg Billionaires Index.
Shares in Paris-based Louis Vuitton, as the company is officially known, rose 0.3% to 903.70 euros at 10:43 a.m. Monday, valuing the company at 454 billion euros ($500 billion).
It comes after demand for LVMH products – handbags and Christian Dior gowns – held up even as soaring inflation and rising interest rates threatened to tip the world into recession.
And LVMH warned this month that it is witnessing slowing growth in the United States, with demand for some commodities affected, and some investors fear that the stock will inevitably be affected in the event of an increase in the economic slowdown.
Louis Vuitton stock evolution
Right now, ironically, worry about a recession is driving up LVMH’s value in dollar terms. Especially after the euro jumped this month to its highest level in more than a year with the decline in the dollar, supported by the growing market expectations that the deteriorating US economy will prompt the Federal Reserve to cut interest rates this year.
Analysts were raising their targets on LVMH stock amid the sharp rally higher. They see room for more gains, as 30 of the 36 analysts tracked by Bloomberg have a Buy rating.
Ashley Wallace of Bank of America Corp. expects the stock to reach 1,000 euros next year. “LVMH is very cheap given the attractiveness of the luxury sector, its strong portfolio of brands and best-in-class execution,” Wallace wrote in a report on April 13.
The 74-year-old Arnault – Chairman and CEO of LVMH – and his family own 48% of LVMH’s capital, and laid the foundation for keeping the company under family control for decades to come.