LVMH Moët Hennessy Louis Vuitton, or LVMH (FR:MC) (LVMUY) has gained attention recently as speculation mounts that the luxury giant could be eyeing a stake in Giorgio Armani. Investors are responding to the rumors, driving the stock higher amid growing excitement about a potential expansion in the high-end fashion sector. MC stock has gained over 3% in the last five trading days.
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LVMH is a European fashion house known for its iconic luxury brands like Dior, Louis Vuitton, Sephora, Fendi, Bulgari, and more. The company is primarily listed on the Euronext Paris exchange but also trades over-the-counter (OTC) in the U.S.
Details on the Potential Deal
Speculation over a major deal began after Giorgio Armani’s death in early September. Following his passing, L’Oréal (LRLCY), LVMH, and EssilorLuxottica (ESLOY) emerged as the top potential buyers of Armani’s beauty and fashion empire.
The three luxury companies were specifically mentioned in Armani’s will, published on September 12, as the Armani Group plans a gradual sale of its assets. The will requires that 15% of the company’s stake be sold within 18 months, with an additional 30% to 54.9% expected to go to the same buyer within five years.
How Buying Armani Could Impact LVMH
For LVMH, the deal could bring better control over licensing, higher profits, and a stronger presence in aspirational and emerging markets. Meanwhile, LVMH chief Bernard Arnault called Armani a “true genius” and said he felt “honored.” He added that if LVMH collaborates in the future, it would aim to further grow its global presence and strengthen its leadership.
Additionally, Berenberg Bank’s analyst Nick Anderson sees LVMH as a strong contender for the deal. He noted that buying Armani could further strengthen LVMH’s dominance in the luxury sector. Recently, Anderson reiterated his Buy rating on MC stock, predicting an upside of 9% from current levels.
Is LVMH Stock a Good Buy?
Overall, MC stock has received a Moderate Buy rating on TipRanks, backed by a total of 17 recommendations from analysts. It includes eight Buys and nine Holds assigned in the last three months. The LVMH share price target is €554.53, which is 10% higher than the current trading level.
