Consumer stocks poised for a recovery

Consumer Discretionary

AIR Capital

AIR expects a wave of upward revisions from European corporations in the coming months as tariff clouds thin, China stabilises, infrastructure spend ramps up and European rates remain low. The missing piece is consumer confidence, which should rebound quickly if geopolitical tensions ease. Consumer names like Inditex, Stellantis, LVMH, Diageo, Kering, Adidas, Nestle and Unilever look compelling after steep share price declines, with valuations back to decade-lows. Many of these firms are pursuing clear turnaround strategies focused on FCF generation, deep efficiency gains (utilising AI) and renewed focus on core businesses - supported by a trend toward insider CEO appointments, after a decade of appointing outsiders.

- 22 August, 2025

Multinationals in China: Consumer caution persists

86Research

A year after the pro-growth signalling from Beijing, most consumer sector multinationals still report subdued household spending in China. Elevated household savings and low consumer confidence - echoed by both luxury and FMCG players - suggest that the recovery has yet to reach full momentum. Weakness is most apparent in discretionary categories, particularly luxury and F&B. Kering reported high-20% sales declines among Chinese consumers, while Unilever and AB InBev flagged weak foodservice volumes. Even Hermes conceded that momentum is lacking and noted a "wait-and-see" mindset, despite modest growth. Looking ahead, unless a shock-and-awe stimulus package arrives, 86Research expects a gradual, selective recovery rather than a broad consumption rebound.

- 08 August, 2025

Tenaris (TEN IM) Italy

Energy

Stockcube

Stockcube opens a short position as TEN's share price reasserts the downtrend and makes new short term relative lows. Their TP is €10.50. The stock was one of the names highlighted in Stockcube’s Daily Europe Top 200 Bulls & Bears report this week, where they also opened a long position in Lonza Group (finds short term uptrends; TP CHF600). Having recently closed shorts in Norsk Hydro (finds short term price and relative support) and Kering (finds long term support at €240), as well as closing their long position in Deutsche Bank (now trades sideways), Stockcube’s portfolio currently consists of 44 open longs and 26 shorts.

- 23 August, 2024

Infineon Technologies (IFX GR) Germany

Technology

ROCGA Research

ROCGA’s cash-flow-returns-on-investments based online platform provides a systematic framework to compare, value and gain insight into companies. IFX is on a list of undervalued companies, along with others, including Roche and Kering. Apart from their proprietary economic returns and conventional valuation indicators, data points such as EV/IC against ROIC/WACC are also available. Their interactive tools allow you to model and value one of 2000 companies across Europe and the US. A free consultation and trial can be arranged on request.

- 08 March, 2024

LVMH & Gucci: Monthly Luxury Survey - China

Consumer Discretionary

JL Warren Capital

2023 stands to be a year of resetting for luxury brands and the best hope is that 2024 builds on a moderate comp in a stabilised economy.

LVMH - sales in mainland China are estimated to have declined 5-10% Y/Y in Jul (first month of negative comp YTD). Aug decline has accelerated but could narrow as Chinese V-Day approaches. Macau and HK continue to boom on overseas buying by Chinese tourists.
Gucci - China sales have collapsed and the brand lags peers, likely due to its bold and loud design used to attract entry-level, younger shoppers going out of fashion. Gucci's deep double-digit decline could improve in Q4 as its new designer launches a new season and easy comp kicks in. However, the fundamental issue of losing share in a down market is likely to take time to address.

- 18 August, 2023

Kering (KER FP) France

Consumer Discretionary

Woozle Research

60% of Gucci store managers interviewed by Woozle over 1Q23 noted that they were underperforming QTD LFL sales targets, marking a severe deterioration vs. last year. Downtrading continues with lower value apparel and ready-to-wear sales trends stronger than premium handbags. Menswear sales continue to underwhelm store managers across Europe. Inconsistent trends reported for Gucci China reopening with the majority of stores indicating softer than expected footfall. Promotional activity in China maintained throughout the quarter in an attempt to attract customers to stores.

- 31 March, 2023

Expectations analysis for European Apparel & Branded Goods

Consumer Discretionary

Willis Welby

Luxury Goods have had a reputation for being one of Europe’s growth areas for a long time and last month they performed well ahead of wider indices. Although the median implied to Y3 EBITM ratio of Willis Welby’s large cap universe is now 96, that still feels tenable given the generally high levels of financial productivity and the almost universal high levels of current and projected revenue growth. In this note, they focus on Cucinelli. While the company is currently on a roll, Willis Welby finds expectations ratios far too high and financial productivity too low. The likes of Kering, Inditex, Richemont and Moncler look far more appealing.

- 06 January, 2023

Kering (KER FP) France

Consumer Discretionary

Woozle Research

Primary research reveals a strong start to Q2 driven by bullish consumer trends in Europe with Asia recovery on track - Gucci: customers undeterred by price hikes are showing greater interest in higher priced and limited-edition items (especially women's handbags and "Gucci Link to Love" jewellery). Store managers are guiding for +11% LFL sales growth y/y. Bottega Veneta: first collection under new creative director is outperforming expectations; attracting younger customers and also seeing fewer delivery delays / faster lead times. Balenciaga: tourist recovery boost; store managers are optimistic amid growing interest in their upcoming collection.

- 10 June, 2022

Hermes (RMS FP) France

Consumer Discretionary

Woozle Research

Woozle’s primary research finds Hermes stores outperforming consensus forecasts - 59% of Store Managers interviewed in the last 90-days reported that they were beating revenue targets for the current quarter. Forecasts 17-20% Y/Y growth driven by strong performances across key markets in Asia and Europe. Customer spending is surging with higher UPT and uptrading trends as limited edition products and new collection ranges are proving to be particularly popular. Also noteworthy, they seem to be less impacted with inventory issues vs. the likes of Gucci (Kering) and Moncler.

- 10 December, 2021

Dufry (DUFN SW) Switzerland

Consumer Discretionary

Hedgeye

If public markets don’t realise the value here, DUFN will be acquired by someone like Kering or LVMH - Brian McGough describes the “three stages to getting paid” on this dominant travel retail luxury consolidator. He argues that analysts are asleep on modelling top line recovery to 2025 where Brian is forecasting EPS of CHF 13.37 (over double consensus). With the company hitting new highs in growth, margins and ROIC, it should be hitting new peak multiples of 20-25x earnings. TP CHF 250+ (400%+ upside).

- 12 November, 2021

Personal Luxury Goods Stocks: Europe's answer to the US tech giants

Consumer Discretionary

EquiVal Research

In the space of just five years, the share prices of the three French heavyweights, Hermès, Kering and LVMH have more than tripled - this is not far short of FAANG-style performance. However, given the scale of the growth and the return expectations already discounted, Piers Nestler wonders if these stocks are beginning to have a scarcity value themselves. If there is some value for money left, he believes it is most likely to be found in the watches and jewellery segment (highlights Richemont and Swatch), which has at least the potential to surprise on the upside.

- 23 July, 2021