Exane BNP Paribas : LVMH (+):
Q1 sales on 22 April: the first quarter with negative organic growth

TP: EUR50 . Downside: 1%

Luxury Goods (-) . France . Price (08 Apr. 09): EUR50.4

LVMH will report Q1 sales on 22 April post market. A conference call is scheduled at 6pm CET

We expect sales at EUR4,076m, with negative organic growth (-5.3% est. vs +12.1% growth in Q1 08). The sharpest declines will be in Wines and Spirits (-20%) and watches (-25%).

The leather goods division should be slightly negative but with Vuitton managing to maintain organic growth in the low/mid single-digit range. For comparison, Vuitton achieved organic growth in the mid teens in H1 08 and around 6-7% in H2 08).

We expect a positive forex impact of around 7%.

We maintain our Outperform rating. The stock is trading on EV/EBIT of 8.6x 09e and 7.8x 10e, far below the historical average of 14x (excluding peaks) and even below the previous historical low of 9.3x, seen in 1993. This is also slightly below the sector average (9.3x 09e and 8.3x 10e for the large caps). The share price is close to our target. We will wait for the Q1 figures before reviewing our forecasts and our target.