Morgan Stanley reiterates Equalweight on LVMH stock amid valuation debate

Morgan Stanley has maintained an Equalweight rating on LVMH (LVMUY) with a price target of EUR450.00, despite the stock's recent decline of around 41% year-to-date. The investment firm notes that the stock is currently near its lowest point in the past 15 years, trading at just 3% above its 52-week low. With a P/E ratio of 17.7, the shares appear undervalued according to Morgan Stanley's analysis, making LVMUY one of its most undervalued stocks.

However, the company's recent performance has raised questions, as Louis Vuitton shows signs of fatigue and Dior failed to deliver a V-shaped recovery following Jonathan Anderson's appointment as creative director. Additionally, Chinese luxury demand has weakened, contributing to a 60% drop in the stock's price since July 2023. Morgan Stanley's analysts are divided on whether the current valuation adequately compensates for the risks facing the company in the near future.