I recently wrote a longer article on LVMH, and after going through the latest numbers, I think the current price below €400 offers one of the more interesting risk/reward opportunities I’ve seen in the stock in years.
For context, LVMH traded above €900 not that long ago. Today, the market narrative is almost entirely negative: China is weak, aspirational consumers are spending less, luxury pricing has arguably gone too far, and Fashion & Leather Goods is barely growing.
But I think the market is increasingly pricing LVMH as if these problems are structural rather than cyclical. The underlying business still looks remarkably strong.
In H1 2026, LVMH generated €38.6bn in revenue. Organic growth was 2%, accelerating to 3% in Q2. More importantly, the company still produced a 22.5% operating margin and €4.1bn in operating free cash flow. Net financial debt also fell from €10.2bn to €8.2bn. That is not what a fundamentally broken business looks like.
And underneath the headline numbers, there are already some signs of improvement.
Fashion & Leather Goods, by far the most important division went from -2% organic growth in Q1 to +1% in Q2.
Other divisions are doing significantly better:
Watches & Jewelry: +11% organic growth in Q2
Selective Retailing: +6%
Wines & Spirits: +5%
Louis Vuitton remains one of the strongest luxury brands in the world, Dior is entering a new chapter under Jonathan Anderson, Tiffany and Bvlgari are performing well, and Sephora continues to grow.
**Why I think the valuation is interesting**
Back in April (earlier post), when LVMH traded around €499, my DCF produced an intrinsic value of roughly €677, while my longer-term target was €762. The share price is now around €400…
The important question is: Has the long-term earning power of LVMH fallen anywhere close to as much as the share price?
Personally, I don’t think it has because the company still owns an almost impossible-to-replicate portfolio of luxury brands, generates billions in cash, has a strong balance sheet and can continue investing in its brands while weaker competitors are forced to cut back.
