In terms of valuation, speculative folly during the pandemic aside, the stock has been trading for the past ten years in a range perfectly defined by a floor of x20 times earnings and a ceiling of x30 times earnings.

The second half of 2023 saw a very sudden contraction in this multiple, which fell back to its floor before rebounding at the end of January 2024. The share price returned to a multiple of x29 earnings in March, before declining again.

As loyal MarketScreener readers well know, over the past four or five years, this erratic yet predictable behavior has been exploited to great effect within our Europe portfolio. Will this episode be any different?

The LVMH share is currently trading at x22 the expected profit in 2024 and x20 the expected profit in 2025. The latest quarterly results were rather good, or rather less bad than expected - notwithstanding a real slowdown in sales in the spirits segment - and Bernard Arnault has been a buyer of the stock on the market for some time now.

His group remains the undisputed heavyweight of the luxury sector, with a market capitalization that surpasses the sum of those of Hermès, Richemont, Kering and Prada combined, all of which are closely followed by our analysts and frequently discussed in our columns. Its strong point: extremely skilful strategic diversification, and unrivalled economies of scale in marketing and distribution across all segments.

Each of these segments - fashion and leather goods, watches and jewelry, perfumes and cosmetics, wines and spirits, distribution - has posted such insolent growth performance over the last twenty years that it's hardly surprising to see the market stymied as soon as growth appears to be stalling. 

Structural inflexion or just a breath of fresh air? The answer, of course, will largely depend on the dynamism of Chinese demand.