the valuation disconnect
The sector has bounced back and re-rated from 17.5x to 20.4x on 12-month forward PER. It is not unusual to see pricey valuation on the market these days, and relative valuation is indeed in line with history. However, the disconnect exposes the risk of sharp share price moves in the case of disappointment and already anticipates a recovery that is not yet visible. Our selective approach continues to privilege LVMH, Moncler and Yoox-Net-a-Porter. We recently upgraded Luxottica to Buy in a secular positive call on the eyewear sector.