LVMH Moët Hennessy

Date: March 16, 2024.

Company’s Overview

LVMH (LVMUY), a luxury titan, reigns supreme across the globe. From iconic fashion houses like Louis Vuitton to renowned champagne brands like Moët & Chandon, they offer a universe of luxury goods — think designer clothing, exquisite jewelry, and prestige fragrances. Their reach is international, ensuring a touch of luxury for discerning customers worldwide.

Competition

Revenue Segments

The Company’s net sales proportions by segment for the most recent quarterly report are composed by:

Related Risks

LVMH, treads a path paved with both glamour and challenges. Economic downturns, currency fluctuations, and evolving consumer preferences toward sustainability can curb their spending. Fakes threaten brand value, while online retail disrupts their traditional brick-and-mortar model. Geopolitical tensions and rising material costs add to the complexity.

Internally, maintaining brand exclusivity while catering to a growing market is a delicate dance. Additionally, navigating luxury tax hikes and adapting to shifting demographics require constant vigilance.

Financial Analysis

Company’s Revenues

Revenues from 2021 to last quarter report:

• Louis Vuitton annual revenue for 2023 was $93.243B, a 11.76% increase from 2022.
• Louis Vuitton annual revenue for 2022 was $83.428B, a 9.81% increase from 2021.
• Louis Vuitton annual revenue for 2021 was $75.973B, a 48.95% increase from 2020.

The yearly revenue from 2010 till 2023 is:

**The 2024 and 2025 values are the expected by the analysts

Company’s Net Income

Net Income from 2020 to last quarter report:

• Louis Vuitton annual net income for 2023 was $16.423B, a 10.67% increase from 2022.
• Louis Vuitton annual net income for 2022 was $14.839B, a 4.21% increase from 2021.
• Louis Vuitton annual net income for 2021 was $14.24B, a 165.12% increase from 2020.

The yearly net income from 2010 till 2023 is:

**The 2024 and 2025 values are the expected by the analysts

Company’s EPS

EPS from 2021 to last quarter report:

• Louis Vuitton 2023 annual EPS was $6.57, a 11.16% increase from 2022.
• Louis Vuitton 2022 annual EPS was $5.91, a 4.48% increase from 2021.
• Louis Vuitton 2021 annual EPS was $5.65, a 165.52% increase from 2020.

Company’s Free Cash Flow

Free Cash Flow from 2021 to 2023:

• Louis Vuitton annual free cash flow for 2023 was $19.914B, a 5.99% increase from 2022.
• Louis Vuitton annual free cash flow for 2022 was $18.789B, a 14.84% decline from 2021.
• Louis Vuitton annual free cash flow for 2021 was $22.062B, a 77.24% increase from 2020.

The yearly free cash flow from 2010 till 2023 is:

**The 2024 and 2025 values are the expected by the analysts

Shares Outstanding

On March 1st, 2023 LVMH announced in a press release that the share repurchase mandate completed on July 20th, 2023 in accordance with its terms.

This mandate, which was put in place as part of the LVMH share buyback program, covered the acquisition of LVMH shares for a total consideration of €1,500m. 1,791,189 LVMH shares were acquired under this mandate.

Asset/Liabilities & Current Ratio

LVMH’s financial picture presents a nuanced perspective. The asset-to-liability ratio of 1.77 indicates a sufficient buffer. This means their assets are nearly double their liabilities (debts), offering some financial flexibility.

On the other hand, the current ratio of 1.32 suggests a situation that merits attention. While it’s above 1, indicating they have more current assets (cash, receivables) than current liabilities (short-term debts), the margin is relatively narrow.

Valuation

Based on DCF analysis, LVMUY’s stock price is undervalued. Note that in the analysis we take into consideration also the cash and cash equivalents and the total debt.

The average consensus recommends overweighting or purchasing the stock.

LVMH shines brightly! They consistently impress with stellar financial results, translating to exceptional returns for their investors. Their industry leadership, evident by their high ROIC, is undeniable. Furthermore, their commitment to shareholder value is clear through share repurchases and strong free cash flow generation.

The fact that their stock appears undervalued adds to the allure. LVMH seems to be a company on a steady upward trajectory, with a winning combination of financial strength, strategic expansion, and rewarding investors. This makes them a highly attractive investment opportunity.

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Disclaimer

Please note that I am not a licensed financial advisor and the information provided here should not be construed as financial advice. I am simply sharing my understanding of the topics based on my research and personal experiences. It is always advisable to consult with a qualified financial advisor before making any investment decisions.

The information I provide is based on publicly available sources and my own interpretations. I strive to provide accurate and up-to-date information, but I cannot guarantee the correctness or completeness of the information.

Any opinions expressed here are my own and do not necessarily reflect the views of any other individual or organisation.

Please use your own judgement and conduct your own research before making any investment decisions.