LVMH, Kering Downgraded By Berenberg As 'Luxury Super Cycle Is Over' — Retail Traders Have Mixed Feelings

Berenberg downgraded stocks of LVMH Moet Hennessy Louis Vuitton SE and Gucci owner Kering SA, two of the world's largest luxury product companies, and gave a dire outlook for the sector broadly.

"After three decades, the luxury super cycle is over," the investment research firm said in a note, according to the summary on The Fly. The firm believes demand for luxury will grow at only 2%-3% annually in the medium term, below the historical norm of 6%.

Constraints on aspirational consumers are more severe than initially modeled, according to the brokerage.

Berenberg downgraded LVMH's Paris share to 'Hold' from 'Buy,' with a price target of 570 euros. That's about 5% below the stock's last close.

The analyst downgraded Kering's stock rating to 'Sell' from 'Hold.' It set a 160-euro price target, which is half of the stock's last close level.

Although luxury goods are typically resilient to economic headwinds, the U.S. tariffs have launched a cascading effect on economies around the world, and even the most affluent of shoppers are keeping their purse strings tight. Those who are a step below are clearly holding off on luxury purchases.  

On Stocktwits, the retail sentiment was 'bullish' for LVMH's U.S. shares and 'neutral' for Kering's U.S. shares as of early Thursday.

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