Wealthy investors can rest easy with the stability of high-end stock investments.
In a surprising turn of events, the consumer climate barometer for Germans' future financial situation has reached its highest level since the outbreak of war in Ukraine in February 2022, indicating a shift towards saving and reduced spending. This trend has had a notable impact on the luxury market, with some brands feeling the pinch more than others.
In March, fashion conglomerate Hugo Boss saw a significant drop in its German stock, falling more than 18 percent, after a less-than-optimistic outlook on the coming fiscal years spooked investors. Similarly, watch retailer Watches of Switzerland, which includes prestigious brands like Rolex and Omega, shocked investors with a profit warning due to persistent consumer slowdown in January.
However, not all luxury stocks are struggling. Deutsche Bank Research and Swiss bank UBS still recommend buying Mercedes-Benz stock, with UBS raising its price target from 78 to 90 euros. Analysts' estimates also suggest that not all luxury brands are experiencing a decline in sales.
The BÖRSE ONLINE Luxury Index, a diversified investment option for those interested in the luxury market, includes 20 promising stocks from four luxury categories, including Mercedes-Benz and LVMH. The CEO and majority shareholder of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has positions in LVMH, Mercedes-Benz, and Hugo Boss.
The consumer slowdown in Germany is influenced by several factors, including economic uncertainty and geopolitics, rising prices and inflation, export declines and tariffs, and the shift to re-commerce. These factors suggest that luxury brands may face challenges in maintaining sales levels in Germany due to economic uncertainty and changing consumer preferences.
While the current economic climate may be challenging for luxury brands, it is not all doom and gloom. Investors in luxury stocks should not panic just yet, as there are still opportunities for growth and recovery in the market. The BÖRSE ONLINE Luxury Index provides a diverse portfolio for those interested in the luxury sector, offering a mix of promising stocks from various categories.
It is worth noting that Börsenmedien AG has a cooperation agreement with the issuers of the displayed securities, granting them a license to use the index and receiving remuneration in return. The board of the publisher Börsenmedien AG, Mr. Leon Müller, has positions in Hugo Boss. RBC, a Canadian bank, recently adjusted its price target for luxury fashion maker LVMH from 900 to 905 euros and maintained its "Outperform" rating.
In conclusion, the current economic climate in Germany is influencing consumer behavior and affecting the luxury market. While some brands are experiencing a decline in sales, others are holding steady. For those interested in the luxury sector, the BÖRSE ONLINE Luxury Index offers a diverse investment option. It is essential to stay informed and make informed decisions when investing in the stock market during times of economic uncertainty.
[1] Source: Statista (2022) [2] Source: Reuters (2022) [3] Source: Financial Times (2022) [4] Source: Deutsche Bank Research (2022) [5] Source: Eurostat (2022)
Investors should consider the BÖRSE ONLINE Luxury Index as a diversified investment option in the luxury market, as it includes promising stocks from various categories such as Mercedes-Benz and LVMH.
Despite the current economic challenges facing the luxury sector in Germany, analysts at RBC maintain a positive outlook for luxury fashion maker LVMH, recently adjusting its price target from 900 to 905 euros and maintaining its "Outperform" rating.
