According to equity analyst GuruFocus, LVMH Moet Hennessy Louis Vuitton SE (LVMUY), listed on the Nasdaq US OTC Market, the US small-cap market, has every indication of being significantly overvalued. As a result, the long-term return on its stock is likely to be significantly lower than the future growth of its business, which has averaged 1.6% over the past three years and is expected to grow at 7.35% per year over the next three to five years.
As a reminder, the GuruFocus value is its estimate of the fair value at which the stock should trade. Its calculation is based on historical multiples at which the stock has traded, the company’s past growth and analysts’ estimates of the company’s future performance.
If a share price is excessively above the GF value line, it is overvalued and its future performance is likely to be poor. On the other hand, if it is significantly below the GF value line, its future return is likely to be higher.
With a current share price of $135.5 and a market capitalisation of $341.2 billion, LVMH Moet Hennessy Louis Vuitton SE is considered significantly overvalued.
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