Luxury Stocks on the Rise: LVMH, Burberry, and Brunello Cucinelli Lead the Charge
Discover why these high-end brands are capturing investor attention and driving market optimism.
The luxury sector is showing surprising strength, shaking off concerns about slowing sales and trade tensions. A recent surge, sparked by LVMH’s impressive third-quarter earnings, suggests the multi-year rally for high-end goods may have more room to run. LVMH’s unexpected return to growth sent a wave of optimism through the market, boosting the entire Stoxx Luxury 10 index.
This has put a spotlight on key players. Analysts are upgrading their ratings on several luxury stocks, signaling renewed confidence. We’ll explore why LVMH, Burberry, and Brunello Cucinelli are capturing the attention of major investment banks like UBS and Deutsche Bank. From Burberry’s promising turnaround strategy to Brunello Cucinelli’s resilient growth, we uncover the investment opportunities that might be hiding in plain sight.
Are Luxury Stocks the Next Big Investment Play?
The world of high-end goods is buzzing with newfound energy. After a period of uncertainty fueled by stagnating sales and global economic pressures, the luxury market just got a significant vote of confidence. French conglomerate LVMH, a titan of the industry, posted a surprise return to growth in its third-quarter earnings, triggering a powerful rally across the sector.
On the day following LVMH’s announcement, the Stoxx Luxury 10 index, which includes giants like Kering and Ferrari, jumped 6.4%—its best single-day performance since January. This renewed momentum has analysts re-evaluating their positions, with several major banks upgrading their ratings on top luxury stocks. For investors, this raises a critical question: Is now the time to add some luxury to your portfolio?
We will dive into the performance and potential of three standout brands that are leading this resurgence: LVMH, Burberry, and Brunello Cucinelli.
LVMH: The Bellwether Bounces Back
As a benchmark for the entire luxury industry, LVMH’s performance is closely watched, and its recent earnings report did not disappoint. The company beat estimates for its third-quarter results, causing its shares to pop 12% in a single day. This impressive showing demonstrated a resilience that many thought had faded.
Analysts were quick to respond. UBS upgraded LVMH stock to a “Buy” rating, hiking its price target to €680. The bank noted that after two years of waiting on the sidelines, it now sees a return to positive earnings per share momentum. Similarly, Citi labeled the results “a ray of hope,” issuing a “Buy” rating with a €630 price target. Bernstein followed suit with an “Outperform” rating and a €700 target, highlighting “beats across all divisions.”
Key drivers behind this optimism include:
Sequential improvement in local spending across major geographies.
The successful turnaround at Tiffany & Co. continues to deliver positive results.
Strong trends in the champagne division and improvements at Sephora.
RBC Capital Markets also raised its price target, noting that while the recovery path may not be linear, LVMH offers the right risk-reward profile for playing the theme of a soft luxury market rebound into 2026.
Burberry: A Turnaround Story in the Making
The iconic British brand Burberry is in the midst of a significant transformation, and early signs suggest its efforts are paying off. The company’s “Burberry Forward” strategy is showing promise, with improvements in sales figures and a notable boost in management confidence. This has led analysts to take a fresh, more positive look at the stock.
Deutsche Bank recently upgraded its rating on Burberry from “Hold” to “Buy” and increased its price target by 25% to £1,500. This represents a significant premium on its recent closing price. The bank pointed to the company’s fiscal first-quarter results, which revealed a 4% year-over-year sales jump in the Americas and strengthening demand from local customers globally.
UBS also turned positive on the brand, assigning a price target of £1,575 and declaring, “It’s Finally Burberry Weather.” After a period of skepticism, the bank now sees encouraging signs from the new strategy that align better with the brand’s heritage. Despite a 20% year-to-date gain in its share price, analysts believe there is more upside potential as the company’s turnaround gains traction.
Brunello Cucinelli: Calm and Resilient Growth
In a sector known for its volatility, Brunello Cucinelli stands out for its unique brand of steady, resilient growth. While some investors were disappointed by a lack of guidance upgrades in 2024, top analysts see long-term value in the Italian luxury firm’s consistent performance.
UBS holds a “Buy” rating on the stock with a price target of €123, projecting a premium of over a third on its recent closing price. The bank expects Brunello Cucinelli to deliver double-digit sales growth this year alongside modest margin expansion, underscoring the “quality nature” of the business. In a market with low visibility, UBS believes the “flight to quality” will continue to support the company’s shares.
Bernstein shares this bullish outlook, having raised its price target to €121. Analysts there noted that Brunello Cucinelli is a “notable outlier” among luxury brands, maintaining a high full-price sell-through rate. They suggest that a recent price correction offers a compelling entry point into a “high-quality, defensive luxury name.”
Why These Luxury Stocks Are Worth Watching
The recent rally in luxury stocks, led by LVMH’s strong performance, signals a potential shift in investor sentiment. While economic headwinds remain, the ability of these top-tier brands to command pricing power and maintain consumer desire is proving to be a powerful asset.
For investors, these three companies offer different but equally compelling narratives:
LVMH represents a diversified bet on the recovery of the entire luxury sector, with its broad portfolio of leading brands.
Burberry presents a classic turnaround play, offering significant upside if its new strategy continues to deliver results.
Brunello Cucinelli provides a defensive, high-quality growth opportunity for those seeking stability in a fluctuating market.
The most dangerous words in investing are often “this time is different,” but the enduring appeal of luxury and the strategic maneuvers of these leading companies suggest that the current optimism is built on a solid foundation. As analysts continue to upgrade their forecasts, keeping a close eye on these luxury stocks could be a rewarding move for any forward-thinking investor.