European luxury stocks fell again on Tuesday as Morgan Stanley joined the chorus of analysts warning that demand for expensive handbags and jewelry in China and Europe is likely to slow.
Shares in French luxury giant LVMH fell as much as 2.3%, extending their drop from the year’s high to about 22%. Cartier owner Richemont dropped as much as 3.3% while Gucci parent Kering and Burberry Group Plc were also lower.
Morgan Stanley analysts led by Edouard Aubin lowered their organic growth forecasts for most luxury companies for the second half of the year, and also trimmed their 2024 profit forecasts, saying that their checks indicate that demand in China softened over the summer and Europe was also weaker.
While recent share-price declines have left the luxury sector approaching so-called value territory, Aubin said it isn’t time to buy the dip. “We expect a weak exit rate to the quarter to intensify the debate around demand normalization,” he wrote.
Morgan Stanley’s comments echo other analysts who have been bearish on the sector recently. Earlier this month, Barclays analyst Carole Madjo reduced her recommendation on LVMH and the firm lowered its view on the sector to neutral from positive. Deutsche Bank’s European equity strategists also downgraded the consumer products sector because of luxury companies’ exposure to China, while analysts at Jefferies and Goldman Sachs Group Inc. see choppy times ahead.
Morgan Stanley’s Aubin downgraded Richemont to equal-weight from overweight today and upgraded Prada to overweight from equal-weight. The analyst lowered his price targets for LVMH, Kering, Moncler SpA and several other luxury stocks.
“Semiliquid funds are making private markets more accessible but are much pricier than public market funds,” according Morningstar.
Despite record plan participation, many workers remain at risk of inadequate retirement savings as Social Security’s future grows more uncertain.
New tie-ups with Advyzon, RightCapital and PreciseFP reflect growing demand for flexible, connected tools.
The recently rebranded Focus Partners Wealth is growing again, this time with a pending deal for a Fairfax, Virginia advisory firm.
The transaction significantly expands the firm's reach and capabilities.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
