How to Invest in Luxury Stocks in 2023
While many individuals may already be familiar with luxury brand stocks, not many beginner investors know that you can invest in them.
With the personal luxury goods market rebounding in late 2022, analysts are forecasting the sector to continue to grow - making selective luxury stocks an interesting addition to a long term portfolio.
In this ‘How to Invest in Luxury Stocks’ article, we cover the best luxury brand stocks to watch and how to invest in global stocks with competitive commissions.
Table of Contents
Why Invest in Luxury Stocks?
According to management consultants, Bain & Company, the personal luxury goods market could reach EUR 360 – 380 billion by 2025 with 6-8% annual growth. While the overall luxury market is trading below 2019 levels, the industry experienced a V-shaped recovery in 2021.
The luxury market has been fuelled by a variety of global factors including a reopening of China’s economy, an increase in luxury demand in suburban areas in the United States and the strength of the online shopping experience.
It is also expected that younger consumers (Gen Y and Gen Z) will make up 70% of the luxury market by 2025 driven by influencer marketing, new advertising mediums and a shift towards more sustainable and ethical goods which are now key offerings among some luxury brand stocks.
Top 10 Luxury Stocks
Luxury good stocks tend to cover companies that tend to operate under the consumer discretionary stock sector category. This category includes stocks that provide products and goods that people don’t necessarily need to have but instead want to have.
While most of the luxury brand stocks are focused on clothing brands, it also covers other industries such as jewellery and watches, cars, etc. Below is a list of ten of the best luxury brand stocks to watch this year.
- LVMH – World's Largest Luxury Company with Multiple Brands & Products
- Kering – Luxury Group Owners of Balenciaga, Gucci, Yves Saint Laurent & More
- Hermès International – French Luxury Design House Specialising in Clothing, Jewellery & Home Furnishings
- EssilorLuxottica – Luxury Eyewear Group which Owns Ray-Ban & Oakley
- Christian Dior – French Luxury House Specialising in Fashion, Fragrances & Accessories
- Burberry – British Luxury Fashion House Specialising in Outer Wear
- Ferrari – Iconic Italian Luxury Sports Brand Car Manufacturer
- Mercedes-Benz – Luxury Vehicles Maker Headquartered in Germany
- Estee Lauder – Cosmetic Company Owner of MAC, Clinique, DKNY & More
- RH – Upscale American Home Furnishing Company
When choosing stocks for your investing portfolio it is important to remember that investments will go up and down in value. As most of these companies are consumer discretionary stocks, the share price will be influenced by the global economy. Be sure to exercise good risk management when
building a portfolio of shares.
Analysis of Luxury Brand Stocks
The list of the top ten luxury stocks to watch this year comes from a wide range of industries. In this section, we analyse the top three luxury brand stocks which will provide a solid foundation to build upon with more technical research using the Admirals Premium Analytics tools.
LVMH – World's Largest Luxury Company with Multiple Brands & Products
LVMH Moet Hennessy Louis Vuitton is one of the world’s most recognised luxury stocks. It is home to 75 luxury houses across six different sectors which include wines and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewellery, selective retailing and other activities.
Some of LVMH’s most recognised brands include Moet & Chandon, Hennessy, Veuve Clicquot, Tiffany, Tag Heuer, Hublot, Sephora, Loro Piana, Fendi, Celine, Givenchy, Louis Vuitton and many others.
Over the past two decades, the LVMH stock price has risen more than 1,000% but with some declines over the period. The stock tends to be more resilient to macroeconomic issues as most of its client base are affluent and not as affected by a downturn in the economy.
In the first quarter of 2022, the LVMH group recorded revenues of 18 billion euros which was up 29% compared to the same period in 2021. The earnings report also stated that every business group recorded double-digit revenue growth with the exception of wines and spirits which were more
impacted by supply constraints.
Both the United States and Europe also achieved double-digit growth while China still grew even throughout extended lockdowns. The growth in the company during a time of high inflation, cost of living crisis, high energy bills, geopolitical conflicts and lockdowns in key regions are why LVMH is considered to be a resilient stock.
How can you invest in LVMH stock? LVMH is listed on the Euronext Paris Stock Exchange. With the Admirals Invest.MT5 account you can invest in stocks listed in France with a competitive commission of just 0.1% with a minimum commission of just 1 EUR.
Kering – Luxury Group Owners of Balenciaga, Gucci, Yves Saint Laurent & More
Not many individuals may have heard of the company Kering. However, most would recognise some of the luxury brands it owns such as Alexander McQueen, Balenciaga, Bottega Veneta, Gucci, Yves Saint Laurent, Boucheron and others.
In 2021, Kering group achieved a record level of revenue that was 35% higher compared to the year before during the pandemic (revenues were still up 13% for that year). Ever House under the Kering banner grew last year, generating revenue of EUR 17,019 million.
Even over the pandemic period, lockdown, supply constraints and high inflation, some luxury companies continued to grow. Online sales surged 55% and now accounts for 15% of total sales in the retail network.
Around 72% of the group’s operating income comes from Gucci with Yves Saint Laurent coming in second providing 14% of operating income to the group. This means the company’s overall profitability is heavily reliant on one brand.
However, Kering is also notable as a potential dividend stock as in 2021 it increased the dividend rate to EUR 12 per share which consists of EUR 3 per share, per quarter. At the time of writing, this provides a dividend yield of 2.43%.
The monthly price chart of Kering’s share price shown above, highlights a long-term uptrend with some significant volatility during 2020 and the start of 2022.
If the price can stay above the 100-period exponential moving average (green line), then long term bulls may still be in control of the market as the price has bounced off this moving average several times before in 2011 and 2016.
How can you invest in Kering shares? Kering shares are also listed on the Euronext Paris Stock Exchange. With the Admirals Invest.MT5 account you can invest in Kering with a competitive commission of just 0.1% with a minimum commission of just 1 EUR.
Hermès International – French Luxury Design House Specialising in Clothing, Jewellery & Home Furnishings
Hermès International was founded in 1837 and specialises in ready to wear clothing, lifestyle accessories, perfume, jewellery, watches, leather goods and home furnishings. The company employs more than 17,500 people around the world.
In its latest earnings report, first quarter sales for this year were up 33% to reach EUR 2,765 million. Revenues were strongest in America, then Europe and Asia. The South Coast Plaza store reopened in California after extensive refurbishment while growth was strongest in France and the UK among the
The company also took the opportunity in its latest earnings report to announce two new workshops for 2025 and 2025 which will be the 23rd and 24th leather goods production sites under its banner. EUR 116 million worth of revenue was also attributed to profits from currency fluctuations.
While many of the other luxury brand stocks discussed so far have multiple brands, Hermès is the overall brand. Therefore, 2021 revenue of EUR 9 billion, up 42% from the prior year, is very impressive.
The monthly price chart of Hermès International's share price shown above highlights a long term uptrend that has been intact since 2006. However, the share price did not escape the global stock market sell-off in 2022 which has driven the price down to some interesting levels.
If the share price can stay above the 50-period exponential moving average (red line), then long term bulls are still in control of the market as there have been multiple bounces at this level before, most notably in 2008, 2014 and 2020.
How can you invest in Hermès International? Hermès International shares are listed on the Euronext Paris Stock Exchange. With the Admirals Invest.MT5 the account you can invest in the stock with a competitive commission of just 0.1% with a minimum commission of just 1 EUR.
How to Invest in Luxury Stocks
To begin investing in luxury stocks, you will need to open a live trading account or practice your investing skills using a demo trading account. With Admirals, you can open both types of accounts.
Below is a step by step process on how to invest in luxury brand stocks from the MetaTrader 5 web platform.
- Login to the Admirals Trader’s Room where you can access different accounts, expert tools and deposit and withdrawal options.
- To open your trading platform, click on the Trade icon next to the relevant account name.
- From the MetaTrader 5 web platform, type in the name of the stock at the bottom of the
- MarketWatch window and then drag the name onto the chart to view the live price.
- To open a trading ticket, click on New Order at the top of the window. This allows you to input entry, stop loss and take profit levels and the number of shares you wish to purchase.
Why Invest in Luxury Stocks with Admirals?
✔️ Admirals is authorised and regulated by the Cyprus Securities and Exchange Commission (CySEC), UK Financial Conduct Authority (FCA) and the Jordan Securities Commission (JSC), among other well-known financial regulators.
✔️ Open an Invest.MT5 account and invest in stocks and ETFs to build a long-term portfolio with competitive commissions:
✔️ US stocks commission of just $0.02 per share and a minimum transaction fee of just $1!
️✔️ France and Germany stocks commission of just 0.1% of the trade value with a minimum transaction fee of just EUR 1!
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✔️ Trade on stock and ETF CFDs (contracts for difference) and trade long and short to potentially profit from rising and falling markets.
✔️ Access the state of the art Premium Analytics section which includes the Technical Insight Lookup indicator which finds actionable trading ideas for you across thousands of markets.
Open a demo trading account or live trading account to get started today! ▼▼▼
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