LVMH Drops 4.04% at Opening Following Morgan Stanley Downgrade
Morgan Stanley downgrades its recommendation on LVMH from overweight to market weight, maintaining a target price of 635 euros, resulting in a 4.04% drop in the stock at the opening to 584.60 euros. The bank has lowered its 2026 earnings per share forecast to 23.6 euros, below the market consensus of 24.2 euros.
Immediate Market Impact and Revised Earnings Forecast
This Monday, Morgan Stanley downgraded its recommendation on LVMH from overweight to market weight, keeping its target price at 635 euros. The impact on the stock was immediate: it opened with a 4.04% drop at 584.60 euros, after closing at 609.20 euros on Friday. Over the past seven days, the loss has now reached 10.35%, reflecting a sharp acceleration of selling pressure. Last Friday's session already saw a decline of 2.64%, in a context weakened by the bankruptcy of American distributor Saks Global, which revealed debts of 136 million dollars for Chanel, 60 million for Kering, and 26 million for LVMH. The American bank has revised its 2026 earnings per share forecast to 23.6 euros from 24 euros previously, placing its estimate 2.6% below the consensus of 24.2 euros. This change of tone comes just three months after Morgan Stanley had upgraded its advice to overweight in October 2025, anticipating a rebound in the Fashion and Leather Goods division. The downward trend since last Friday illustrates the abrupt reversal of sentiment on the stock, which was still trading above 630 euros at the beginning of the previous week. The share of capital traded remains limited to 0.03%, indicating that the correction is occurring without panic but with determination.
Technical Breakdown and Market Indicators
The price of 584.60 euros sharply breaks the support threshold of 609.20 euros, the closing level on Friday and a recent technical anchor point. This break occurs while the stock is already significantly below its 50-day moving average, which is at 629.31 euros, nearly 45 euros above the current price. The gap has widened sharply since the opening, indicating a significant loss of momentum. The RSI has slipped to 38, approaching the oversold threshold of 30 and suggesting a marked weakening of momentum, though not yet indicating extreme overselling. The MACD histogram shows a value of -2.68, confirming a short-term bearish reversal while the MACD line at -0.03 remains close to zero but below the signal line at 2.64. This configuration illustrates a gradual deterioration of the bullish momentum that prevailed just a few weeks ago. Equita SIM had last Thursday raised its target from 565 to 610 euros with a hold recommendation, anticipating a gradual improvement in luxury trends. However, expectations remain highly dispersed among analysts.
