LVMH’s market value surpasses $500 billion, a first in Europe

The company’s rising value has swelled the wealth of the world’s richest person, Bernard Arnault

LVMH’s market value surpassed $500 billion, becoming the first European company to reach that milestone, thanks to booming sales of luxury goods in China and a strengthening euro.

The achievement comes less than two weeks after LVMH joined the ranks of the world’s 10 biggest companies, powered by a surge in first-quarter sales. Rival Hermes International subsequently published its own strong numbers, reinforcing the view that China’s reopening from pandemic lockdowns is fueling growth across the industry.

The company’s rising value has swelled the wealth of the world’s richest person, Bernard Arnault, who built LVMH into a global powerhouse through a series of acquisitions. His fortune stands at almost $212 billion, according to the Bloomberg Billionaires Index.

Shares of Paris-based LVMH Moet Hennessy Louis Vuitton SE, as the company is formally known, climbed 0.3% to €903.70 at 10:43 a.m. Monday, valuing the company at €454 billion ($500 billion).

Demand has held up for LVMH products — Louis Vuitton handbags, Moet & Chandon Champagne and Christian Dior gowns among them — even as surging inflation and rising interest rates have threatened to tip the world into recession.

LVMH did caution this month that it’s seeing a slowdown in US growth, with demand for cognac and leather goods particularly affected, and some investors fret that the stock inevitably will be hurt should the economic slowdown worsen.

For now, paradoxically, concern about a recession is lifting LVMH’s value in dollar terms. The euro this month jumped to its highest level in more than a year as the dollar slumped, fueled by increasing market expectations that a worsening US economy will prompt the Federal Reserve to cut interest rates this year.

Analysts have been raising their targets on LVMH’s stock amid the steep run higher. They see room for further gains, as 30 out of the 36 analysts tracked by Bloomberg have a buy-equivalent rating.

Bank of America Corp.’s Ashley Wallace sees the stock hitting €1,000 in the next year. “LVMH is too cheap given the attractiveness of the luxury goods sector, its strong portfolio of brands and best-in-class execution,” Wallace wrote in a report April 13.

Arnault, 74, is LVMH’s chairman and chief executive officer. He and his family own 48% of LVMH’s share capital, and he’s been laying the groundwork to keep the company under family control for decades to come.