Stocks Exchange gives multiples

The Exchange is a point of investment, of speculation and also and above all of reference. Touch the pulse on the markets and investor intentions. But how do you judge the titles of luxury? What expectations do you have in this particular sector of the market? A good estimate and expectations index are, in this sense, the stock market multiples. It is noteworthy that the price-earnings ratio referring to the shares of listed companies is one of the easiest to read.

This relationship is not the Holy Grail for a precise analysis, because of the many variables that more or less structurally can present, yet it is able to provide interesting answers. Observing the multiples of companies listed on the world’s major stock exchanges, the luxury sector dominates the top with extremely high multiples in sportswear, even for a moment of particularly favorable expectations in the short term which obviously accentuate its attractiveness on the markets. This does not mean that sportswear is an area to bet on. It is fundamental in this type of market, but we must also consider as attractive many titles for which the contingent moment is not favorable in purely stock-market terms and not in company health. So we arrive at the point of how the analysis of multiples is very useful for an overview but not absolute truth about the value and expectations of the single title. Here, more in-depth analyzes and dynamics intervene, which, considering a larger set of factors, are able to provide more precise data on the prospect of a company’s growth or less and its financial reputation.

The top of the rankings, however, is influenced by brands whose ratios are distorted by anomalous results in terms of denominator (falling profits) or, in any case, by turbulent business phases. For example, Ovs has a triple multiple compared to that of Brunello Cucinelli; Geox has a multiple of 66.67; Movado, listed on the Nasdaq, which beats every hyper-evaluation record, with a three-digit multiple of 1,673.08. The results of groups acting as holding companies are penalized, for which the Stock Exchange always calculates a discount: Pvh has a multiplier of 15.77, Kering of 16.95, Aeffe of 18.26. Among these, the best is Lvmh with 24.36. Meanwhile you can sometimes give inaccurate results. However, the indicator translates into interesting messages. According to a study carried out by Pambianco, published in the October issue of Pambianco Magazine, concerning the multiples of companies listed on the main world stock exchanges (calculated by Yahoo Finance on September 13), luxury is found to dominate the top of the ranking. And this message was quite predictable. In Europe, Hermès, for example, is strong with a multiple of 46.82. But immediately behind, and this is a first surprise, there is Brunello Cucinelli that boasts a quotient of 39.91, superior to other emblazoned players, among which also a strong brand like Moncler (whose multiple is 35.62) . Another not taken for granted, the very high multiples of sportswear, thanks to a moment of particularly favorable short-term expectations: the day of the survey (September 13th), for example, Nike, which in 2018 was the title with the best performance in Wall Street, had recorded a new record on the list, reaching a multiple of 71.34. The top of the rankings, however, is influenced by brands whose ratios are distorted by anomalous results in terms of denominator (falling profits) or, in any case, by turbulent business phases. For example, Ovs has a triple multiple compared to that of Brunello Cucinelli; Geox has a multiple of 66.67; Movado, listed on the Nasdaq, which beats every hyper-evaluation record, with a three-digit multiple of 1,673.08. The results of groups acting as holding companies are penalized, for which the Stock Exchange always calculates a discount: Pvh has a multiplier of 15.77, Kering of 16.95, Aeffe of 18.26. Among these, the best is Lvmh with 24.36.