Morgan Stanley has revised its rating for LVMH (LVMUY, Financial) from Overweight to Equal Weight, adjusting the price target to EUR 590 from the previous EUR 740. The downgrade comes as LVMH experiences a weaker-than-anticipated start to the fiscal year, with all five of its divisions reporting disappointing sales figures.
A key concern is the Fashion & Leather Goods segment, which recorded a significant decline in sales during the first quarter. This downturn follows a 1% year-over-year drop in the fourth quarter, escalating to a 5% decline in the first quarter. The primary factor driving this negative trend is a notable reduction in consumer demand from China, which has impacted global sales.
The research also points to a decline in spending by American consumers, further contributing to the company's financial challenges. Investors are encouraged to consider these developments as they evaluate the company's stock performance in the coming months.
