Moet Hennessy Louis Vuitton: A Sum Of Its Parts

About: LVMH Moët Hennessy - Louis Vuitton, Société Européenne (LVMHF)
by: Edgar Torres H
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Edgar Torres H
Long/short equity, special situations, event-driven, momentum

I attempt to value the LVMH based on the sum of its parts.

Depending on each segment's CAGR I assign a different valuation approach.

The Perpetuity method is based on the required rate of return suggested by the CAPM, while the growth approach depends on a PEG of 1. For the CAPM, I perform a Covariance/Variance analysis to determine the beta.

The resulting valuation signals that the company is currently overvalued by approximately 23%. The resulting valuation for the LVMHF ticker would be $256.67 per share.

Nevertheless, the company's business and financial fundamentals are excellent, hence I recommend holding for now and buying at the suggested price levels.

In this article, I'll attempt to perform a valuation of LVMH-Moet Hennessy Louis Vuitton (OTCPK:LVMHF). The approach I'll employ is based on the CAPM and PEG ratio. Then, I'll apply these methods to