LVMH Delivers Strong Results in 2021 Helped by Positive Industry Backdrop and Share Gains in Leather

We expect to increase our fair value estimate for wide-moat LVMH by a mid- to high single digit following strong full-year results, that exceeded our expectations. Like previously reported peers Richemont and Burberry, LVMH saw an acceleration in demand for the last quarter of the calendar year. Brand momentum, especially in its fashion and leather division, which accounts for over 70% of operating profit, remained strong. However, as for its peers, we believe current growth is helped by transitory tailwinds (savings from foregone experiences, strong asset prices, and the psychological need for reward after stress) that we are weary to extrapolate into the future.