LIVE MARKETS-Luxury: are we out of the woods?

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LUXURY: ARE WE OUT OF THE WOODS?

Luxury ended last year on a high, with improving quarterly sales topping expectations for most brands and fuelling hopes the sector might be finally out of the woods.

Is that true?

JPMorgan doesn't think so.

A muted price environment, cooling US spending, a still-difficult Chinese backdrop, and tough comparisons in Japan are all challenges the US bank believes will make for a Q1 that shows no further improvement.

"We think... that the journey in 2025 might remain bumpy and hence that it is too early to turn constructive on the sector," write JPMorgan analysts.

In detail, they sees material downside to estimates for Swatch UHR.S, Kering PRTP.PA , and Ferragamo SFER.MI. They expect sector proxy LVMH LVMH.PA trading sideways in the coming weeks due to potential earnings risks.

On the other hand, they favour Richemont CFR.S and Prada 1913.F, citing their strong brand momentum and (for Richemont) exposure to the thriving jewellery category.

(Danilo Masoni)

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