LVMH dethrones Total at the top of the CAC-40
it is Better to sell of the dresses of Dior, and Louis Vuitton bags that extract and refine oil ! Perhaps it is the reflection that has made the CEO of Total, Wednesday, may 3, by looking at its Stock price. The major oil directed by Patrick Pouyanné has indeed been dethroned from its rank as the first capitalization of the Paris by the world number one of luxury, LVMH, which continues to develop to the delight of its shareholders. In a year, the Total rose from 41 to 46 euros, LVMH from 145 to 231 euros.
on Wednesday, the closing of the stock Exchange, LVMH was worth, and 117 billion euros and a Total of 116,113 billion. the ” This is a first since the end of the 1980s, since there was usually the values of the heavy industry at the head of the cap “, said Andrea Tueni, an analyst at Saxo Bank, the Agence France-Presse (AFP).
Drop in the price per barrel
Total has beautiful exhibit good resilience since the fall in the price of a barrel, having fallen from $ 115 in mid-2014 to $ 50 today, the value remains unattractive. Since the beginning of the year, the share recorded a decline of 4 %, while the CAC 40 index rose by more than 8 %. It is true that the company has always been undervalued Stock compared to its peers, anglo-saxon ExxonMobil, Shell and Chevron. The latter weighs two times more in Exchange for a comparable size.
conversely, the title LVMH has gained almost 27% since January, while its rival Kering increased by 33 % and signed the best performance of the flagship index of the Paris stock Exchange. Despite a slowdown in the chinese market, in particular related to anti-corruption laws enacted by Beijing in 2012, the luxury giant recorded very good results. In the first quarter, its sales rose 15 percent, and a scant ten billion euros. And when LVMH announced on April 25, the total absorption of Dior, one of the jewels of the empire of billionaire Bernard Arnault, the title has immediately climbed 7 %.
see also : LVMH-Kering : luxury in the family
This is not the first time that Total is dethroned, but he had always been by large industrial groups. In 2000, buoyed by the Internet bubble and the growth of telecommunications, Orange had a moment ahead of, with a little more than 100 billion euros. Then in June 2007, nearly two years after its ipo, EDF had taken the head of the CAC-40 in front of Total, with more than $ 130 billion. In debt, facing huge investments in the nuclear and leaded by the strong decline of the wholesale price of electricity, the largest electricity group had to leave the CAC 40 at the end of 2016. Finally, the pharmaceutical group Sanofi, whose Total was for a long time as a major shareholder, has exceeded two times the major oil, in 2012, and then at the end of 2015.
It is too early to tell if LVMH will retain a long time the first place. But the values of the two companies to follow the opposing slopes : from 2014, the funding Total has increased from $ 170 billion to $ 116 billion. At the end of 2007, in the boom of the oil prices, the major weighed over 200 billion, or 20% of the market capitalization of Paris. The value is very exposed to the cycles of oil and the volatility of the barrel, which can last years, as well as the pressures of public opinion on the fossil fuel sector (coal, oil and gas).
Read also : The new discoveries of oil have collapsed by 2016
The value of LVMH, it has not ceased to grow : it amounted to some 40 billion ten years ago and now exceeds $ 116 billion. The trend has been more effective in recent years and investors like growth stocks less exposed than the oil and mining companies.