Barclays (LON:BARC) Plc has recently downgraded its rating on the broader luxury goods sector, including French conglomerate LVMH, due to anticipated slower sales growth in China. This revised perspective could further pressurize the already strained stock prices of the sector, as reported on Thursday.
Over the past month, the luxury goods industry has witnessed a significant devaluation. Barclays analysts, led by Carole Madjo, have linked this trend to deteriorating macroeconomic indicators from China and the nation's transition towards more normalized growth patterns. These findings were disclosed after the analysts' recent visit to China.
The analysts' observations indicate potential challenges for luxury goods companies in sustaining their growth momentum in the Chinese market. This situation poses concerns for the industry as it may result in subpar performance and potentially exert additional downward pressure on their stock values. The downgrade by Barclays serves as a warning to investors about the potential risks associated with investing in this sector under current market conditions.
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