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ERROR: type should be string, got "https://www.barrons.com/articles/lvmh-has-a-plan-to-polish-tiffany-that-should-boost-the-luxury-giants-stock-51574935200\nEuropean Trader\nLVMH Has a Plan to Polish Tiffany. That Should Boost the Luxury Giant’s Stock.\nRupert Steiner\nNov. 28, 2019 5:00 am ET\nPhotograph by Stephane De Sakutin/AFP via Getty Images\nLVMH Moët Hennessy Louis Vuitton is paying a fat all-cash $16.2 billion to breathe new life into U.S. jeweler Tiffany.\nWith shares in the world’s largest luxury-goods conglomerate touching an all-time high of 408 euros ($448), investors should keep an eye on whether they have further to go. When the firm bought Italian jeweler Bulgari for €4.3 billion in cash and stock in 2011, the same question was asked. LVMH stock (ticker: MC.France) has soared more than 210% in the past five years.\nWhile that past performance doesn’t guarantee future success, LVMH, the creation of France’s richest man, Bernard Arnault, has the scale and experience to make it work. He’s likely to position Tiffany (TIF) as a more exclusive brand. There will still be a place for $200 entry-level bling, but only for aspirational items that fit the brand.\nThe geographical fit is mostly complementary. Flavio Cereda, an analyst at broker Jefferies, wrote that Tiffany is “overindexed” in North America and Japan, while LVMH in “underindexed” in Europe and Asia-Pacific excluding Japan.\n“The fact that Tiffany has 90 stores in the latter by itself points to a significant value-extraction opportunity,” he wrote.\nHSBC has a target price of €470, while Société Générale has a more modest €435. The stock fetches an expensive 25.3 times this year’s expected earnings and trades in line with its peers, which include Cartier owner Richemont (CFRUY) and Gucci parent Kering (KER.France).\nLVMH posted annual revenues of €46 billion for 2018 with operating profit of €9.8 billion, which HSBC forecasts will rise to €14.2 billion by 2021.\nThe company has a market value of €206 billion, employs 156,000 and owns more than 4,590 stores globally. In the 1970s, Arnault, now 70, joined his father’s engineering firm, persuaded him to focus on investing in property, and took the helm within a decade.\nIn the 1980s, he bought luxury goods firm Financière Agache and snapped up distressed assets, including textile firm Boussac Saint-Frères. It owned Christian Dior, upscale department store Le Bon Marche, and other retail chains that he sold. He formed LVMH in 1987, through the $4 billion merger of Louis Vuitton with Moët Hennessy. He has since gathered 75 brands spanning wine, fashion, perfume, and jewelry that include Krug, Givenchy, Guerlain, and Tag Heuer.\nWhile Arnault has market-leading positions in soft luxury (fashion), he is left wanting in hard luxury (jewelry). Tiffany could help fix that. “Jewelry remains one of the most attractive categories in the luxury sector because of a lack of bid targets with sufficient scale and prestige,” wrote Roger Fujimori, an analyst at RBC Capital Markets.\nIn a statement, Arnault said that the company plans to “develop this jewel with the same dedication and commitment that we have applied to each and every one of our maisons.”\nArnault has increased earnings with LVMH’s jewelry brands. At the time of the Bulgari deal, the Italian jeweler had a profit margin of 8%. After less than a decade receiving the LVMH treatment, margins have grown to an estimated 25% and Bulgari’s operating profit has multiplied five times. If Arnault works the same magic with Tiffany, the stock will have more room to shine. •\nLVMH Moët Hennessy Louis Vuitton is paying a fat all-cash $16."