Does Dior’s Recovery Signal a Long Term Value Opportunity in 2025?

• Wondering if Christian Dior at €593.5 is quietly trading at a bargain or already priced for perfection? This article breaks down what the numbers are really saying about the stock's value.
• Over the last week the share price is up 2.5% and it has gained 4.6% over the past month, but that still sits against a slightly negative YTD return of -1.2% and a more modest 7.5% gain over the past year.
• Recent market interest has been shaped by ongoing discussions around the resilience of global luxury demand and Christian Dior's role inside the broader LVMH ecosystem, including how its fashion and leather goods brands are positioned in a softer macro backdrop. Investors have also been watching management's strategic push into high margin categories and selective price increases, which helps explain some of the share price recovery after a -10.9% three year drawdown, alongside a 47.7% gain over the past five years.
• On our framework Christian Dior scores a 3/6 valuation check score, suggesting it looks undervalued on some metrics but not across the board. We will walk through those methods next before exploring a more nuanced way to think about its fair value that goes beyond a single number.

Christian Dior delivered 7.5% returns over the last year. See how this stacks up to the rest of the Luxury industry.

Approach 1: Christian Dior Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth by projecting the cash it can generate in the future and discounting those cash flows back to today in € terms.

For Christian Dior, the model starts from last twelve month Free Cash Flow of about €13.5 billion and applies a 2 stage Free Cash Flow to Equity approach. In the near term, cash flows are projected to grow at gradually slowing rates, from around 4.5% to just above 2% a year, reaching an estimated €18.0 billion by 2035. Only the first five years typically rely on analyst inputs, and the later years are extrapolated by Simply Wall St based on more conservative growth assumptions.

When all those projected cash flows are discounted back, the intrinsic value for Christian Dior is estimated at roughly €1,164 per share, compared with a current market price of about €593. This implies the shares trade at a 49.0% discount to the modelled fair value, which suggests the market is pricing in a much weaker long term cash flow profile than the DCF assumes.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Christian Dior is undervalued by 49.0%. Track this in your watchlist or portfolio, or discover 925 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Christian Dior.

Approach 2: Christian Dior Price vs Earnings

For a profitable business like Christian Dior, the Price to Earnings (PE) ratio is a natural starting point because it compares what investors pay for each euro of current profits. In general, companies with faster, more reliable growth and lower perceived risk can justify a higher PE multiple, while slower growth or higher uncertainty usually call for a lower, “normal” range.

Christian Dior currently trades on a PE of about 23.5x, which is above the Luxury industry average of roughly 17.7x but below the broader peer group average of around 39.1x. Those comparisons provide useful context, but they do not fully reflect Dior’s specific growth profile, profitability or risk.

That is where Simply Wall St’s Fair Ratio comes in, a proprietary estimate of the PE multiple a company should trade on after accounting for its earnings growth outlook, margins, risk factors, size and industry. Because it is tailored to the company’s fundamentals rather than a broad group of peers, it can give a more precise sense of whether the current PE looks stretched or conservative. On this framework, Christian Dior’s actual PE sits below its Fair Ratio, indicating the shares still look attractively valued on an earnings basis.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Christian Dior Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Christian Dior’s business with the numbers behind its fair value. A Narrative is your story about the company, translated into expectations for future revenue, earnings and margins, which are then turned into a financial forecast and, ultimately, a fair value estimate. On Simply Wall St, millions of investors build and share these Narratives in the Community page, making it easy to explore different perspectives without needing to build a full model yourself. Narratives help you consider how your view of Fair Value compares to today’s market price, and they update automatically as fresh information, like earnings results or major news, comes in. For example, one Christian Dior Narrative might assume conservative growth, lower margins and a modest fair value, while another focuses on premium brand strength and faster expansion that support a much higher fair value estimate.

Do you think there's more to the story for Christian Dior? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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