Last update on 2024-06-05

LVMH Moet Hennessy Louis Vuitton (MOH.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

LVMH Moet Hennessy Louis Vuitton (MOH.DE) achieves an impressive Piotroski F-Score of 8/9 for 2023, showcasing the company's robust financial health and investment value.

Short Analysis - Piotroski Score: 8

We're running LVMH Moet Hennessy Louis Vuitton (MOH.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

LVMH Moet Hennessy Louis Vuitton scored 8 out of 9 on the Piotroski F-Score, which indicates strong financial health. The analysis shows that LVMH has positive net income, cash flow from operations, an increasing and favorable return on assets, and improved current ratio, with a decreasing number of shares. The company's gross margin and asset turnover have grown, evidencing better operational efficiency. However, its leverage increased slightly, though it remains under control. Overall, LVMH demonstrates strong financial robustness across most criteria, making it a promising stock from a financial perspective.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score analysis, LVMH appears to be a very solid investment. The high score of 8 out of 9 indicates that the company is financially strong with consistent profitability, efficient operations, and good liquidity. It would be worth considering for investors who are looking for stable and potentially profitable long-term investments. However, investors should still continue to monitor for any economic changes and any potential fluctuations in leverage. It appears to be a strong candidate for further analysis and possible investment.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of LVMH Moet Hennessy Louis Vuitton (MOH.DE)

Company has a positive net income?

The net income criterion assesses whether LVMH (MOH.DE) has generated positive earnings, which indicates profitability.

In 2023, LVMH reported a net income of €15.174 billion, signaling strong profitability. This positive trend has been consistent over the past 20 years, showcasing LVMH's robust financial health and ability to generate earnings consistently, even under varying economic conditions. In 2023, the net income increased by approximately 8% from €14.084 billion in 2022. Therefore, this criterion adds 1 point to the Piotroski score. Such sustained earnings underscore LVMH’s strong market position and operational efficiency.

Company has a positive cash flow?

Operating Cash Flow (CFO) represents the amount of cash generated by a company's regular business operations. It is a key indicator of the company’s financial health and cash-generating abilities.

For LVMH Moet Hennessy Louis Vuitton (MOH.DE), the Cash Flow from Operations (CFO) in 2023 stands at €18,403,000,000, which is a significant positive figure. This positive cash flow is indicative of the company’s robust financial health and ability to generate cash from its core business operations. Analyzing the historical data, LVMH has consistently shown growth in CFO over the last 20 years, starting from €1,842,000,000 in 2003 and rising impressively to its current figures in 2023. The upward trajectory, peaking and sustaining above €10 billion since 2019, reflects well on its operational efficiency and market strength. In the context of Piotroski Analysis, the positive CFO signals a healthy business performance, earning 1 point for LVMH. This trend is highly favorable as it demonstrates sustained operational success and excellent financial management over a prolonged period.

Return on Assets (ROA) are growing?

Change in ROA: compares the Return on Assets (ROA) of a company year over year. If ROA increases, it indicates better efficiency in using assets to generate earnings, adding 1 point in the Piotroski score.

In 2023, LVMH Moet Hennessy Louis Vuitton showcased a slight increase in ROA to 0.109 from 0.1084 in 2022. Despite this small change, the positive trend signifies that LVMH has marginally improved its profitability and efficiency in asset utilization. This improvement, although modest, is significant enough to merit one additional point in the Piotroski score. Analyzing the last 20 years, there is a noticeable trend of increasing operating cash flows, which suggests sustainable asset performance. It should also be noted that LVMH's ROA has consistently lagged behind the industry median, which was 0.688 in 2023, indicating room for further efficiency enhancements.

Operating Cashflow are higher than Netincome?

Explain the criterion for LVMH Moet Hennessy Louis Vuitton (MOH.DE) and why it is important to consider

This criterion examines whether the operating cash flow (OCF) exceeds the net income (NI). A higher operating cash flow compared to net income indicates strong cash generation as a company is essentially turning its sales into cash more efficiently. It signals a high quality of earnings because cash flow is less subject to manipulation compared to net income.

Liquidity of LVMH Moet Hennessy Louis Vuitton (MOH.DE)

Leverage is declining?

Change in leverage assesses a company's risk by evaluating its debt levels relative to its equity.

The leverage ratio of LVMH Moet Hennessy Louis Vuitton has increased marginally from 0.172 in 2022 to 0.1742 in 2023. Given this increase, no point is added under this criterion. Over the last 20 years, the company's leverage hit a peak in 2020 at 0.2276 and was at its lowest in 2007 at 0.0806. The consistent fluctuation suggests a strategic use of debt financing. Nonetheless, the slight uptick in leverage in 2023 indicates a marginal increase in debt risk, remaining within a relatively stable historical range but pointing towards rising obligations.

Current Ratio is growing?

Current Ratio measures a company's ability to pay short-term obligations. It is calculated by dividing current assets by current liabilities. A higher ratio indicates a stronger liquidity position.

LVMH's Current Ratio increased from 1.2599 in 2022 to 1.3188 in 2023. This incremental rise suggests a marginally improved liquidity position, indicating that LVMH has slightly enhanced its ability to cover short-term liabilities with its most liquid assets. In comparison to the last 20 years, LVMH's Current Ratio has generally been below the industry's median; however, it has been improving over the recent years. Particularly, from 2015's ratio of 1.4051 to 2023's ratio of 1.3188, while falling behind the industry's median ratios which dropped from 2.0835 to 1.56 over the same period. This trend is positive but highlights an area where LVMH might strengthen further to align closely with industry benchmarks.

Number of shares not diluted?

Change in Shares Outstanding for LVMH Moet Hennessy Louis Vuitton (MOH.DE): why it's significant to monitor and its impact on investor perception.

The Outstanding Shares for LVMH Moet Hennessy Louis Vuitton (MOH.DE) increased from 502,120,694 in 2022 to 500,056,586 in 2023. This represents a decrease in the number of shares. Given this decrease, LVMH would earn 1 point on the Piotroski Score for this category. Over the last 20 years, the general trend in outstanding shares has seen various fluctuations: from a low of approximately 475 million shares in 2008-2009 to peaks above 500 million in 2012-2022. This downtrend in 2023 might reflect strategic buybacks or attempts to consolidate ownership, a positive indicator for investors.

Operating of LVMH Moet Hennessy Louis Vuitton (MOH.DE)

Cross Margin is growing?

Gross Margin compares a company's gross profit to its revenue. A higher margin indicates better efficiency and profitability.

In 2023, LVMH Moet Hennessy Louis Vuitton (MOH.DE) reported a Gross Margin of 0.688, compared to 0.6844 in 2022, marking an increase. This positive trend earns LVMH 1 point in the Piotroski Score. Notably, this margin has outperformed the industry median consistently over the past 20 years, further solidifying the company's competitive edge in profitability.

Asset Turnover Ratio is growing?

Asset Turnover measures a company’s efficiency in using its assets to generate sales. This ratio basically indicates the productivity of a company's assets.

In 2023, LVMH Moet Hennessy Louis Vuitton (MOH.DE) reported an Asset Turnover of 0.619, a slight increase from 0.6092 in 2022. This increment, although modest, signifies a positive trend. With the scored 1 point as per Piotroski's criteria, it highlights the company's improved efficiency in asset utilization to generate sales. Historical data underscore that while ratios have fluctuated during economic contractions and expansions, the current rise aligns with post-pandemic recovery trends seen in many luxury sectors.