STOCKS NEWS EUROPE-LVMH replaces Richemont in UBS preferred list
UBS adds LVMH to its "most preferred list" after the stock's relatively poor performance recently, replacing Richemont from the list following the company's lower-than-expected third quarter sales.
The bank believes the underperformance in LVMH shares against the sector has now been overdone, saying it sees "reasonable downside protection as expectations going into FY12 results on 31 January are unlikely to be overly optimistic following the read-through from Dior results in late December."
UBS adds Swatch to its "least preferred list", saying the company is less likely to outperform the luxury sector in the near-term while investors focus on the potential de-stocking effects at Asian watch retail partners following the cautious commentary by Richemont.
Luxury goods group Richemont, maker of Cartier jewellery, gave a cautious outlook on Monday after slowing wholesale demand for its pricey products pushed third-quarter sales growth below forecasts.
UBS removes Hermes from its "least preferred list" after its recent uptick in share price performance.
LVMH gains 0.6 percent, Swatch falls 0.9 percent, Heremes is up 0.2 percent, while Richemont shares are up 0.4 percent.
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