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Goldman Sachs began covering 10 European luxury companies on October 5, 2026, assigning Buy ratings to Richemont, LVMH, Moncler and Prada. The bank’s analysts expect the sector’s muted growth to improve in 2027 after several years of post-pandemic normalization, while cautioning that recovery prospects differ widely by company.
The initiation, reported by Investing.com, also put four companies at Neutral and two at Sell. Goldman’s outlook links the sector slowdown not only to economic conditions but also to pricing and product innovation, and forecasts organic sales growth across its coverage universe rising from 6% in 2026 to 7% in 2027.
Pricing and innovation cited in the slowdown
Analysts led by Erwan Rambourg said aggressive price increases and a slower pace of innovation contributed to weaker sales. The report said traditional luxury brands raised prices by about 60% between mid-2019 and mid-2026, a move Goldman said may have pushed some customers toward both more expensive labels and more accessible alternatives.
The bank’s forecast anticipates a return to mid-single-digit growth, with its 2026 estimate based partly on depressed comparisons from 2024 and 2025. The figures are Goldman’s projections, not company guidance, and the reporting did not provide individual company sales forecasts or the assumptions behind each estimate.
Four companies receive Buy ratings
Goldman set a price target of CHF 225 for Switzerland-based Richemont, citing its exposure to jewelry growth. Its €500 target for LVMH reflects an expectation that leather goods could rebound from 2027; analysts also described the group as a potential sector proxy if investors’ interest in luxury recovers.
Moncler received a €62 target, with the bank pointing to its expected top-line growth, margins and opportunity in the United States. Goldman set a HK$52 target for Prada, saying its valuation appeared low relative to expected earnings growth. Price targets are analyst estimates, not guarantees of future share prices.
Neutral ratings reflect differing company risks
Goldman initiated Kering, Burberry and Brunello Cucinelli at Neutral, and maintained a Neutral rating on Zegna. The bank viewed Kering’s relaunch plan as unproven and said Brunello Cucinelli’s steady growth was reflected in its valuation. The report did not give price targets for these four companies in its published summary.
The split ratings underscore Goldman’s view that a broader sector rebound would not lift every luxury name equally. Its coverage includes companies with different brand portfolios and business models, but the available report did not detail comparative valuation multiples or provide a company-by-company breakdown of the sales-growth forecast.
Hermès and Swatch start at Sell
Goldman assigned Sell ratings to Hermès and Swatch. For Hermès, the analysts said the company’s historic pattern of double-digit quarterly growth had ended; the article also reported that its shares were down 36% year to date as of the note, without specifying the precise measurement date.
For Swatch, Goldman cited valuation and the challenge of rebuilding sustainably high margins at a smaller scale. Those are the bank’s assessments, rather than statements from either company. Investing.com’s account of the initiation did not include responses from the companies or Goldman.
Regional outlook points to uneven demand
Goldman expects U.S. outperformance to extend into 2027 and beyond, a rebound in Middle Eastern sales and stabilization in China. It expects European demand to remain subdued apart from spending associated with American tourists, according to the report.
The next milestone in the bank’s thesis is its projected improvement in organic sales growth in 2027. The published account does not specify a scheduled follow-up from Goldman or provide a timetable for when the bank expects to review its ratings and targets.
