By Kit Norton
Luxury stocks, which have been hit hard by the Iran war, rose early Friday, a day after President Donald Trump announced that a peace deal was coming together.
Most stocks retreated, but the day's trading gave investors a taste of what an Iran war peace rebound might look like.
LVMH Moët Hennessy Louis Vuitton American depositary receipts rose 0.4% to $117.58 on Friday. Watch and jewelry maker Cie. Financière Richemont, commonly known as Richemont, gained 0.4% to $22.34. Hermes International advanced 0.7% to $195.03.
Among other luxury stocks, Kering, the company behind Gucci and Yves Saint Laurent, advanced 0.3% to $30.87. Shares of Ermenegildo Zegna, the Italian luxury fashion house, fell 0.2% to $14.88.
The luxury sector also includes Ray-Ban owner EssilorLuxottica and supercar maker Ferrari, along with fashion brands Brunello Cucinelli and Burberry.
Ermenegildo Zegna is up 45% this year and has gained 71% over past 12 months, closing higher in eight of the last 11 weeks. The stock seems to be consolidating in a bull flag formation that began at the round $10 level. A decisive move above the $15 pivot could open the door to a run toward $20 by year-end, implying 33% upside from current levels, according to Barron's technical analysis.
Hermes ADR is down 21% this year, falling 19% since the start of the war in the Middle East. LVMH shares have declined 8% since the war began and are down 22% in 2026.
The STOXX Europe Luxury 10 index, which tracks 10 top European luxury goods makers, has dropped 5.4% since the close on Feb. 27, the day before strikes between the U.S. and Iran began.
However, Richemont shares have gained 9% since Feb. 27, part of a 3% advance on the year. Richemont stock has also gotten more expensive since the start of U.S.-Iran war, with a current forward price-to-earnings ratio of around 27 times versus 24.9 times on Feb. 27.
Hermes Chief Financial Officer Éric Marie Joseph du Halgouët on April 15 told analysts that the company has been hit by a slowdown in tourism, linked to the situation in the Middle East, and that wholesale activity has been significantly affected by lower sales, particularly in the Middle East and in airports.
LVMH executives have also said that the war has hit business in the region. The company owns brands including Louis Vuitton, Christian Dior, Bulgari, TAG Heuer, and Hublot.
In March, UBS wrote there are buying opportunities in the beaten down luxury goods sector despite "significant investor anxiety" tied to the U.S. war with Iran.
Of the 26 firms polled by FactSet, LVMH has a bullish average Overweight rating with a $118.36 price target. Similarly, Hermes also has an average Overweight rating with a $195.96 price target, based on 24 analysts tracked by FactSet.
Luxury stocks have struggled in recent years due to stagnant growth in China, a major market for many of the sector's flagship names. But just as signs emerged that Beijing would finally step in to revive consumer spending, the start of the Iran war threatens to trigger a spike in global inflation and tank demand in another key market, the Middle East.
If the U.S. and Iran sign a peace deal, these overhangs could disappear as quickly as they arrived.
LVMH is trading about 23% below its 52-week high after forming a double bottom pattern just above the $100 level from June 2025 and is now building a potential inverse head and shoulders base.
A breakout above $120 could mean the stock makes a quick move toward $135 later in the second half of 2026, according to technical analysis.
LVMH American depositary receipts currently have a forward price-to-earnings ratio of around 21.3 times compared with 22.8 times from the day before the war between the U.S. and Iran began.
Meanwhile, Hermes has a forward price-to-earnings ratio of about 35 times compared with 43.1 times right before the war began.
Write to Kit Norton at kit.norton@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 12, 2026 13:44 ET (17:44 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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