Kering Shares Under Pressure: Luxury Sector Weighed Down by China and Economic Conditions
The luxury group's stock is significantly down during a session in the heavy Paris market, where the luxury sector is once again among the main weights on the CAC 40. The session unfolds against a backdrop of a marked deterioration in the French economic situation, just two days before the annual general meeting of Gucci's owner.
Kering Among the Steepest Declines in the CAC 40 in a Penalized Luxury Sector
Kering shares are down 1.92% at €242.55, among the steepest declines in the CAC 40, which is down 0.99%. The luxury sector is heavily targeted this morning, with Hermès at the bottom of the index (-2.85%).
The S&P Global Flash PMI survey published this Tuesday indicates French activity has dropped to 43.5 in May, its lowest since November 2020. External demand has declined at its most marked rate in eighteen months, and cost inflation has surged due to rising energy prices. This macro environment mechanically weighs on cyclical stocks exposed to high-end purchasing power.
The luxury sector's situation remains degraded in China, a key market for the group: sales of jewelry and gold there have plummeted by 21.3% year-on-year in April according to the NBS, while overall retail barely progresses (+0.2%). Over the past month, Kering shares had already been battered by tensions in the Middle East, followed by a brief rebound on May 6, and then a new analyst downgrade last week. Over three months, the stock has declined by 15.72%, although it remains up nearly 40% year-on-year.
Stock Falls Below the 50-Day Moving Average, Annual General Meeting Set for May 28
The stock is now fluctuating between its 20-day moving average (€239.89), slightly breached upwards, and the 50-day moving average at €248.01, which has moved above the stock after the recent downturns. The gap to the 200-day average remains significant, nearly 11% below €272.42, indicating that the medium-term trend is still deteriorated. The RSI at 53 remains neutral, signaling neither overselling nor a technical rebound in progress.
The support identified at €227.25, already tested on May 18 and at the end of April, remains the reference low zone for the stock. The resistance at €280 seems out of reach in the short term, given the distance separating the current price from the 200-day moving average.
From a valuation perspective, the stock is trading at about 36.9 times the earnings expected for the current fiscal year and 24.5 times those of the next fiscal year, according to the consensus of analysts surveyed. This multiple reflects the expectation of a gradual recovery in results, but could leave little margin if the Chinese commercial dynamics do not stabilize. The next statutory appointment: the annual general meeting is scheduled for May 28, 2026.
