LVMH Stock Tests Key Technical Level Amid Talk of Asset Sales and Sector Divergence

LVMH shares ended the week locked near their 50-day moving average with RSI at 75.9, as a tentative rally faces profit-taking risk, mixed earnings, and a potential strategic overhaul.

LVMH’s shares ended last week locked in a tight battle around their 50-day moving average, a level that has become the focal point for traders trying to gauge whether recent gains are the start of a real recovery or just a bear-market bounce. The stock closed Friday at €470.80, logging a weekly advance of 3.14%, yet the year-to-date decline remains a painful 26.64%. With the Relative Strength Index sitting at 75.9 – deep into overbought territory – the risk of profit-taking is rising as quickly as hopes of a sustained turnaround.

The tentative rally draws some support from rival Richemont’s upbeat first-quarter update, which highlighted robust jewelry demand and underscored how that category is outperforming both fashion and watches. Richemont reported a 14% rise in jewelry sales, while watch revenue inched up just 1%. LVMH’s own first-quarter numbers confirm the pattern: its Watches & Jewelry unit expanded organic sales by 7%, but the far larger Fashion & Leather Goods division – the primary driver of investor sentiment – slipped 2% on an organic basis. Group-wide organic revenue grew a mere 1%, and reported sales fell 6% as currency headwinds took a 7-percentage-point bite out of the top line.

Against this uneven performance, management is reportedly exploring a strategic overhaul. Sources indicate that LVMH is weighing the sale of underperforming assets in its Wine & Spirits and Perfumes & Cosmetics divisions, both of which experienced sales declines last year. Bernard Arnault, the group’s chief, has painted the remainder of the year in stark terms, sketching out a scenario that ranges from recovery to catastrophe – a framing that has fueled speculation about a deep restructuring aimed at concentrating resources on the highest-margin core brands. The market appears to have taken the news calmly for now, but the pressure to deliver concrete action is mounting.

Meanwhile, geopolitical and macroeconomic headwinds continue to complicate the picture. The Middle East conflict has been a drag, with the region contributing roughly 6% of group revenue but suffering demand plunges of up to 50% at some retail locations in the spring. LVMH estimates the geopolitical effect shaved one percentage point off organic growth in the first quarter. Currency volatility added another layer of difficulty, translating into a 7% headwind on reported sales and offsetting any operational gains in segments like Wines & Spirits (organic growth of 5%) and Selective Retailing (organic growth of 4%).

On the charts, the outlook remains ambiguous despite the recent stabilization. The stock finished almost exactly on its 50-day average of €470.46, but it still trades 14.18% below the 200-day line at €548.61 – a gap that underlines the persistence of the longer-term downtrend. The 52-week high of €652.80 is a distant memory, while the 52-week low of €443.15 is dangerously close. If LVMH can hold above the 50-day mark, a further advance toward €516.86 is possible. A break below the yearly low, however, would confirm that the Richemont-led tailwind is insufficient to reverse the broader slide. The next major catalyst comes in July, when the group reports second-quarter results and is expected to elaborate on its restructuring plans – a moment that could either validate the current reprieve or expose its fragility.