Key insights
- The author discusses LVMH's sponsorship of F1 and its potential growth in the Middle East, while noting headwinds from slow growth in China and geopolitical instability. LVMH's valuation is below its 5-year average, and earnings are projected to decline. The author speculates that reduced geopolitical tensions could boost the Middle East market. This has a slightly negative influence on US markets as it highlights potential weakness in a major global luxury brand, which could signal broader economic concerns.
F1 is one of the fastest growing spectator sports in the world. Last year LVMH signed a 10 year sponsorship deal with F1, replacing Rolex as the main sponsor. Ive even seen F1 as peoples ‘interests’ on dating profiles. Drive to Survive is apparently something they all watch too. With F1 expanding more into the Gulf wealth giant’s states I feel like that is a key source of market growth.
LVMH is currently trading at a forward P/E of ~18x (5 yr average 26x).
€81bn revenue im FY25 (€85bn in FY24).
€11bn earnings in FY25 (€13bn in FY 24)
Stock €471.05 (52-Week Range: €436.55 – €654.70).
Now I know fuck all about the history of this company and a lot of this is vibes. Stock has been punished a bit presumably by the slow growth in china, as well as the US/Israel war with Iran which is destabilising a key market. Though once Trump realises he can’t do any more any the war quietens down I feel the Middle East market will grow lots.
What’s everyone’s thoughts?