European Luxury-Goods Stocks May Benefit From Weaker Currencies

Investors forecasting the euro and Swiss franc will weaken against the dollar may find comfort in shares of European luxury-goods companies.

Cie. Financiere Richemont SA and LVMH Moet Hennessy Louis Vuitton SA are among stocks that would benefit disproportionately if the currencies fall further from year-ago levels, according to Thomas Mesmin, a Paris-based analyst at brokerage CA Cheuvreux. For every 1 percent decline in exchange rates, the industry’s average earnings before interest and taxes may rise 1.3 percent to 1.5 percent, he said.