Goldman Sachs Picks Four European Luxury Stocks for Buy Ratings

Goldman Sachs has begun coverage of 10 European luxury stocks, assigning Buy ratings to just four. The firm argues that the current muted growth in the sector will not last and predicts 2027 as a turning point after three years of post-COVID normalization.

Analysts led by Erwan Rambourg attribute the slowdown in sales to aggressive pricing and a slower pace of innovation, which they link to strategic inertia. Traditional luxury brands raised prices by about 60% between mid-2019 and mid-2026, pushing consumers toward both higher-end and more accessible brands.

Goldman forecasts organic sales growth for its coverage to rise from 6% in 2026 to 7% in 2027, with the sector reverting to mid-single-digit growth. Regionally, the firm expects U.S. outperformance to continue, a mechanical rebound in the Middle East, and stabilizing sales in China, while Europe remains muted apart from American tourist flows.

The four Buy-rated stocks include Richemont, with a CHF225 price target, described as the 'purest exposure to compounding jewelry growth.' LVMH received a €500 target, with expectations of a rebound in leather goods from 2027. Moncler was given a €62 target, citing best-in-class top-line growth and a tangible U.S. opportunity. Prada’s target is HK$52, with analysts saying its valuation looks 'particularly undervalued' relative to its earnings growth.