J.P. Morgan International FTM 15 May 26 European Semiconductors; European Luxury Goods; European Utilities; Taiwan Equity Strategy; Deye - A; Transition Talks; Japan Equity Strategy; Prosus & Naspers and More

研报英文原文证据摘录

J.P. Morgan International FTM 15 May 26 European Semiconductors; European Luxury Goods; European Utilities; Taiwan Equity Strategy; Deye - A; Transition Talks; Japan Equity Strategy; Prosus & Naspers and More

xury, thanks to positive structural

drivers we had explored in our note 18-karats of strength. In this context, we reiterate our PCW call on Richemont (-10% YTD,

-2% since the start of the conflict), reporting next week. Overall, we think the backdrop for luxury companies is not as

unfavourable as recent share performances would suggest, with wealth creation remaining strong in the US and specific

markets (e.g. Korea), albeit highly volatile and polarised, notably as we head into Q2 and Q3 highly dependent on tourist spend

that will likely remain subdued in this geopolitical environment. In this context, we continue to favour stories with self-help

angles to drive growth (category exposure, specific brand momentum dynamics). We see soft luxury growth outlook as

particularly challenging, notably in context of price and mixed capped as well as intensified competition (especially from

Chanel, see our note Soft luxury competition is heating up: all eyes on Chanel ). Hence, despite the YTD underperformance,

we think it might still be too early to argue for a sustainable re-rating of LVMH and Hermes until fundamentals (besides the

Middle East) start inflecting (in soft luxury our preferred name is Prada). Similarly, given continued macro uncertainty, high

execution risk in the turnarounds, and downside risk to numbers on our estimates, we remain Underweight on Kering, Burberry,

and Swatch. In contrast, we reiterate Richemont as our top pick in luxury, and also remain positive on RTW names (Brunello

Cucinelli, Moncler, and Zegna).