LVMH stock falls below €507 as Arnault criticizes 2% wealth tax plan

Highlights

- LVMH shares declined 0.8% to €506.60 as bearish technical signals deepen, with RSI at 42 and price trading below key moving averages.

- CEO Bernard Arnault warned against a proposed 2% wealth tax on fortunes above €100 million, citing risks to the French economy.

- A break below €502 support could trigger further downside toward €484 in the short term.

A clear descending channel has formed since late July, with lower highs and lower lows defining the structure. The failure to reclaim the €520–525 resistance zone in early September led to a renewed selloff, with recent lows testing the critical support level at €502.00. This level has held multiple times in Q3, acting as a short-term floor. However, a decisive break below €502 would open the path to the next support zone at €484–€488, which corresponds to May’s swing low.

Momentum indicators are also confirming the bearish setup. The 14-day Relative Strength Index (RSI) stands at 42, trending lower but not yet in oversold territory, suggesting room for further downside. The MACD (Moving Average Convergence Divergence) remains below the signal line, with histogram bars showing growing bearish momentum. In addition, the stochastic oscillator is turning down from the midline, signaling weakening buying pressure and potential for a new leg lower.

LVMH stock price dynamics (July 2025 - September 2025). Source: TradingView

Volume has been neutral to slightly declining, reflecting a lack of buying conviction. Notably, recent down days have seen higher-than-average volume compared to up days, a classic sign of distribution in technical terms. Short-term resistance sits at €515, followed by €525 (50-DMA), which needs to be reclaimed to shift sentiment. A break above that zone could lead to a test of the 200-DMA at €548.70, but that scenario appears unlikely without a catalyst.

Arnault pushes back on wealth tax proposal

LVMH is now also facing regulatory headwinds in France. On September 21, CEO Bernard Arnault publicly denounced a proposed “billionaire tax” targeting individuals with assets over €100 million. The proposed levy would impose an annual 2% tax on large fortunes and has gained significant traction among left-leaning parties and the French public—recent polls show up to 86% public support.

Arnault called the plan “dangerous and counterproductive,” warning it could lead to capital flight and a deterioration of France’s business environment. The French government is under pressure to close its widening budget deficit and has floated broader tax increases on large corporations, including a temporary hike on companies earning over €1 billion annually. If implemented, LVMH estimates its additional tax burden could rise by €700 to €800 million.

These developments come at a politically sensitive time. The centrist government, led by Prime Minister Lecornu, is negotiating 2026 budget measures with opposition parties. Failure to secure parliamentary support for these proposals could trigger a confidence vote. For LVMH and other major French corporates, the political climate introduces fresh uncertainty around tax policy and fiscal planning.

Price outlook and investment scenarios

Over the next 6 to 12 months, LVMH faces a series of headwinds. Demand for high-end fashion and spirits is softening, particularly in China and Japan, while Europe and the U.S. are showing stagnation. If discretionary spending remains subdued, particularly in key Asian markets, LVMH may struggle to return to organic revenue growth in the near term. Margin pressure is likely to persist as costs remain sticky and pricing power becomes harder to exercise without eroding demand.

In a bearish scenario—with weak demand, sustained tax pressure, and ongoing macro uncertainty—LVMH stock could decline another 10–15% from current levels, testing the €450–470 range. However, in a more constructive scenario where Asian demand stabilizes, the fashion cycle improves, and tax risks ease, shares could rebound back above €530, supported by margin recovery and strong cash flow.

LVMH is reportedly eyeing a potential acquisition of Giorgio Armani, valued between $5 billion and $7 billion, aiming to leverage brand scarcity and legacy appeal in a consolidating luxury market. TD Cowen highlights strategic synergies in leather goods, global marketing, and operational scale, while stressing the importance of maintaining Armani’s creative autonomy and pricing discipline.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.