LVMH Shares Drop 8% at Opening Following Disappointing Annual Results

Annual Financial Results Unveiled

The world's leading luxury company disclosed an annual revenue of 80.8 billion euros, along with an operating income of 17.8 billion euros. The operating margin came out at 22%, declining due to unfavorable currency fluctuations. The group's net income stood at 10.9 billion euros, while the operational cash flow increased by 8% to reach 11.3 billion euros. Organic growth in the fourth quarter was limited to 1%, confirming the trend from the third quarter. Geographically, the dynamics appear mixed: Europe declined in the second half of the year, Japan suffered from the normalization of tourist spending after a historically weak yen in 2024. In contrast, the United States showed growth driven by strong domestic demand, while the rest of Asia returned to an upward trajectory in the latter part of the year. A negative currency effect of 3% weighed on the consolidated accounts, with the perimeter effect remaining negligible.

Stock Performance and Market Trends

The stock is now significantly below its 50-day and 20-day moving averages, located at 624.34 euros and 619.97 euros respectively, indicating a reinforced downward trend. However, the price remains slightly above the 200-day moving average, set at 537.38 euros, which now serves as a crucial short-term benchmark. The RSI indicator is at 36, signaling an oversold zone without reaching an extreme threshold. Course target revisions by analysts reflect increased caution. DBS Bank raised its target from 469 to 528 euros while maintaining a neutral recommendation, whereas Jefferies increased its target from 530 to 610 euros, also with a hold advice. These adjustments, made on January 26 and 27, suggest a potential rebound of respectively 2% and 13% compared to the current price, but indicate a generally moderate market expectation amid macroeconomic uncertainties.