Investment banks bet on LVMH. What other luxury stocks does Wall Street recommend buying?

Several investment banks upgraded LVMH's ratings after the company's surprise report of a return to growth in the third quarter triggered a rally in the luxury sector. Although shares of leading luxury goods manufacturers are now trading at a markedly higher price than two days ago - during this time the STOXX Europe Luxury 10 Index rose 7% - major Wall Street players still see upside potential in a number of European luxury stocks, CNBC reports.

"Over the past two years, we have taken a cautious stance on LVMH, waiting for signs of a return to positive earnings per share momentum, and in our view, they have now emerged," analysts at UBS, Switzerland's largest bank, wrote on Oct. 16 and raised their target price on the luxury giant's securities to €680 and their rating to Buy.

Citi analysts this week also gave LVMH shares a Buy rating with a €630 target, seeing a "ray of hope" in the company's third-quarter results. Bernstein called LVMH shares the best investment idea in the luxury goods sector for the fourth quarter, with an Outperform rating and €700 target price.

RBC Capital Markets raised its target price on LVMH securities from €550 to €575 and also recommended buying them: "We remain positive on the recovery of the soft luxury category through 2026 and, in our view, LVMH offers the optimal risk/return ratio to play this theme."

Burberry shares have risen more than 20% since the start of 2025, but Deutsche Bank believes the upside potential is not yet over. "While the starting point is high, we believe this is not yet the limit," the bank's analysts said. They sharply raised their target price to £1,500, suggesting a 25% upside potential, and upgraded their rating from Hold to Buy. "The implementation of the Burberry Forward strategy is on track and there are early signs of success," Deutsche Bank said, pointing to improved sales figures and increased management confidence.

UBS, in turn, set the paper's target at £1,575. "The weather has finally arrived for Burberry," UBS analysts said. - After prolonged skepticism that the brand's promotional measures were not in line with its historical positioning, we are now positive on the paper due to encouraging signs of its new strategy."

UBS set a €123 target price on Brunello Cucinelli shares, more than a third above the closing price on October 16. The bank's analysts pointed out that while investors were disappointed by the lack of a forecast upgrade from the company in 2024, the value of Brunello Cucinelli lies in its "quiet but sustainable long-term growth, which is unique to the sector." UBS expects Brunello Cucinelli to show double-digit sales growth in 2025 and "moderate" margin expansion, which the bank said confirms the high quality of the business.

Bernstein analysts are also positive on the paper: this week they raised their target to €121. "The recent price correction (also due to an attack by short-sellers - Oninvest) provides an opportunity to enter a high-quality, defensive luxury sector paper at a discount, even if investors may need time to believe in its [success] story again," they think.

This article was AI-translated and verified by a human editor