Research on the investment value of LVMH - based on multiple valuation method

Zipeng Dong; Rongxin Hui; Yifan Xia

doi:10.54691/bcpbm.v31i.2666

Authors

Zipeng Dong
Rongxin Hui
Yifan Xia

DOI:

https://doi.org/10.54691/bcpbm.v31i.2666

Keywords:

LVMH; Luxury industry; Multiple valuation; LVMH value.

Abstract

With the improvement of people's living standards, the luxury industry has attracted more consumers' attention, and then investors think that the luxury industry is profitable to invest in. Among them, LVMH owns more than 50 brands and is the largest luxury group in the world today. However, whether LVMH's current stock price and its value are reasonable still needs further calculation. Therefore, this research aims to study the investment value of LVMH. Thus, the research observes the market performance of LVMH for the fiscal year 2021, identifies the competitors of LVMH by comparing the revenue, profit, net income, etc, and finally collects the P/E Ratio and the EV/EBITDA of LVMH and its competitors to analyze the valuation of LVMH by the Multiples Valuation Method. The study finds that LVMH's stocks are under-valued. This may be due to the limitations of the calculation method used. In the future, more computational methods can be used to enhance the accuracy of the calculation.

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