LVMH, Kering Downgraded By Berenberg As 'Luxury Super Cycle Is Over' — Retail Traders Have Mixed Feelings

Demand for luxury will grow at only 2%-3% annually in the medium term, below the historical norm of 6%, the investment research firm believes.

Berenberg downgraded stocks of LVMH Moet Hennessy Louis Vuitton SE and Gucci owner Kering SA, two of the world's largest luxury product companies, and gave a dire outlook for the sector broadly.

"After three decades, the luxury super cycle is over," the investment research firm said in a note, according to the summary on The Fly. The firm believes demand for luxury will grow at only 2%-3% annually in the medium term, below the historical norm of 6%.

Constraints on aspirational consumers are more severe than initially modeled, according to the brokerage.

Berenberg downgraded LVMH's Paris share to 'Hold' from 'Buy,' with a price target of 570 euros. That's about 5% below the stock's last close.

The analyst downgraded Kering's stock rating to 'Sell' from 'Hold.' It set a 160-euro price target, which is half of the stock's last close level.

Although luxury goods are typically resilient to economic headwinds, the U.S. tariffs have launched a cascading effect on economies around the world, and even the most affluent of shoppers are keeping their purse strings tight. Those who are a step below are clearly holding off on luxury purchases.  

On Stocktwits, the retail sentiment was 'bullish' for LVMH's U.S. shares and 'neutral' for Kering's U.S. shares as of early Thursday.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<