Leandro
Equity Analyst at Best Anchor Stocks
Hermès' leather business underpins its resilience because it is the category the company controls most. Its most impressive Q3 result was about 10% organic leather growth while peers struggled; overall growth was 4.3% in Q3 and 5.5% over nine months despite challenges in the Middle East, China and France. The valuation pays for mid-single-digit growth when few luxury peers are growing, with somewhat less upside in a boom. x.com x.com
Hermès offers an expected annual return of about 11.5% even under a conservative model that assumes France's exceptional taxes persist and growth does not accelerate. The realistic return likely sits between the base and bull cases, closer to 13-14%, though the base case remains the anchor. It looks more attractive now partly because there are fewer better risk-adjusted opportunities elsewhere than a few months ago. x.com
Hermès now trades at its cheapest price-to-free-cash-flow in 10 years, 29.6x against a 47x ten-year median. The main appeal is that it is an easy stock to hold for a very long time. AI makes the world very uncertain and many businesses will change a lot, but people will still want a Hermès bag in 20 years. It is the one portfolio stock that can be held for 20+ years. x.com
Hermès and Ferrari are the only luxury companies worth holding, as unique, concentrated brands in a sector that has mostly ridden momentum. Ferrari stands out most for its premium product, with only about 14,000 cars a year, its pricing, repeat customers and order book. x.com x.com
Hermès and LVMH are a tough long pitch at about 30x earnings while the luxury slump stays broad-based. Per alphaportai, LVMH's business units are struggling across spirits, leather goods and perfume. Hermès is a little better and looks to be taking some share in leather goods. Buying luxury when it is distressed would be appealing, and this is not a reason to short Bernard Arnault, but a 30 P/E is hard to accept. x.com x.com x.com
LVMH may struggle to fix its problems because Louis Vuitton, a key brand, is losing its appeal. Gen Z and aspirational buyers are no longer interested in entry-level LV leather goods, and anecdotally the top 1% now view the brand poorly. Fashion and Leather Goods organic growth was -1% in H1 2026, with sequential declines in Asia and Europe; Dior is still doing well. @MRougemont counters that it is a Europe problem, with new LV products selling well in the US. x.com x.com x.com x.com x.com
LVMH deserves another look now that sentiment has turned against luxury and its brand moat, leaving the stock at about 15x earnings. x.com
LVMH still looks somewhat expensive despite falling about 50% over three years. A 20x P/E is not cheap given weak recent quarters and falling sales. Management's performance has been disappointing, and new risks are starting to emerge. x.com
Ferrari, Hermès and LVMH are the perfect anti-AI investments because the rich, and those who want to be rich, love these brands. x.com
L'Oréal's results show its resilience, its appeal and that its premium valuation is justified. Per @Loris_Dalleau, who expected 1-2% growth, the release came in well above expectations. x.com
LVMH is likely to break below its 200-month moving average, which would be game over and mark the end of the luxury goods era. In 2009 that average held, but the 10-year minus 3-month Treasury spread was above 350 basis points; it is now just 90, so it should break easily, though price may hover around it first. The stock has already broken a 2023-2024 double top, taken out its 2021 peak and lost its 2009 trend, and the market was not impressed by earnings. x.com
