How is the stock market doing in the summer? Trends.be polls equity market observers weekly about their preferred securities.
This week it is the turn of Caroline Reyl, manager of the Premium Brands fund at Pictet Asset Management.
1/ Ferrari
Ferrari remains a solid investment. Fiscal Year 2023 numbers are ticking all the boxes at a faster-than-expected pace. The company is conservatively managed, can rely on record demand and very strong pricing power. The order book is full until 2025 and margins are high and continue to rise. In addition, this year there will be the launch of new models, including the “Purosangue”. This will not only contribute to sales but also to margins thanks to their positive pricing.
2/ InterContinental Hotels Group
The 2023 figures from InterContinental Hotels Group (IHG) are very good and show no sign of a slowdown compared to the trend of recent months. The revenue per room is still higher than in 2019 and we expect a further increase in the occupancy rate. The current valuation of the hotel industry is below historical levels. IHG is confident in the 2023 outlook, driven in particular by continued strong leisure demand and the revival in the business segment, while price negotiations are progressing well in this segment.
3/ Richemont
Richemont is a model of Swiss quality with relatively high entry prices and attractive margins, coupled with a particularly healthy balance sheet with plenty of liquidity. The company realizes attractive margins on a portfolio of world-renowned top brands such as Cartier, Van Cleef & Arpels, Jaeger-LeCoultre or the originally Belgian Delvaux. In addition, the luxury group is fully benefiting from the rebound in sales from Asia and more specifically China, where customers are still eager to spend after 2 years of forced austerity due to the Covid crisis.
4/ LVMH
A luxury icon, with products ranging from lipstick to haute couture. LVMH has a range of brands across hotels, luggage, jewelry, liquor, apparel and many others, creating a complete experience for customers and allowing for many synergies. With significant exposure to China, LVMH is reaping the rewards of revenge-spending since the country reopened. The brand is also expanding in the United States and Europe and broadening its target audiences to include male consumers and Generation Z. Margins are sustainably high after the pandemic: Louis Vuitton saw sales increase by 25%.
5/ L’Oreal
One of the biggest names in the cosmetics industry. With about 30% of its sales in China, the company is benefiting from the country’s reopening, which should also ease supply problems over the past year. L’Oréal is benefiting from the popularity of its products as people go out more and social life resumes. International tourism is recovering and the European holiday season has started. This warrants additional optimism as a large part of cosmetics sales profits are generated by traveler purchases, at margins twice as high as in other sales channels.
Last week:
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2023-07-23 07:33:49
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