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When LVMH Moët Hennessy – Louis Vuitton, Société Européenne (EPA:MC) released its most recent earnings update (31 December 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how LVMH Moët Hennessy – Louis Vuitton Société Européenne performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see MC has performed.
Did MC beat its long-term earnings growth trend and its industry?
MC’s trailing twelve-month earnings (from 31 December 2018) of €6.4b has jumped 18% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 8.1%, indicating the rate at which MC is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is only because of an industry uplift, or if LVMH Moët Hennessy – Louis Vuitton Société Européenne has seen some company-specific growth.
In terms of returns from investment, LVMH Moët Hennessy – Louis Vuitton Société Européenne has invested its equity funds well leading to a 21% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 8.7% exceeds the FR Luxury industry of 5.7%, indicating LVMH Moët Hennessy – Louis Vuitton Société Européenne has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for LVMH Moët Hennessy – Louis Vuitton Société Européenne’s debt level, has increased over the past 3 years from 15% to 17%.
What does this mean?
LVMH Moët Hennessy – Louis Vuitton Société Européenne’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While LVMH Moët Hennessy – Louis Vuitton Société Européenne has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research LVMH Moët Hennessy – Louis Vuitton Société Européenne to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MC’s future growth? Take a look at our free research report of analyst consensus for MC’s outlook.
- Financial Health: Are MC’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.