French luxury goods maker LVMH’s market value surpassed $500 billion, becoming the first European company to reach that milestone.
The company’s market rally comes on the back of 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.
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 Moët Hennessy Louis Vuitton SE, as the company is formally known, climbed 0.3 percent to €903.70 at 10:43 a.m. Monday, valuing the company at €454 billion ($500 billion), Bloomberg reported.
LVMH and its French luxury rivals are to the European stock market what Big Tech has been to the US.
LVMH, however, cautioned 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, fuelled 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.
Stock rally pushes Arnault’s fortunes further
Arnault, 74, and his family own 48 percent of LVMH’s share capital, and he’s been laying the groundwork to keep the company under family control for decades to come.
The sprawling conglomerate, with its 75 labels ranging from Dom Perignon to Givenchy and Tiffany & Co., became a training ground for ambitious designers such as Marc Jacobs and the late Virgil Abloh at Louis Vuitton, Raf Simons at Christian Dior and Phoebe Philo at Celine seeking to make a name for themselves.
The strong performance of LVMH has propelled Arnault’s fortune higher, making him the world’s wealthiest person, ahead of Elon Musk and Jeff Bezos.
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