Luxury stocks surged this week after French luxury conglomerate LVMH — a bellwether for the sector — posted a surprise return to growth for the third quarter, putting Europe’s high-end firms on course to continue a multi-year rally. The sector has boomed in recent years, but stagnating sales, price rises , and renewed trade tensions have fueled questions about the outlook for high-end goods. But the day after LVMH’s Tuesday earnings update, the Stoxx Luxury 10 index — which counts LVMH, Gucci owner- Kering and Ferrari among its constituents — closed 6.4% higher, marking its biggest daily gain since January and its second-best day this year. The index extended those gains with a modest rise on Thursday. Swiss investment bank UBS still sees upside potential for a handful of Europe’s luxury stocks. Its top picks, laid out in a note last week, are Brunello Cucinelli , Prada , Burberry , Richemont , and Ferrari, all of which have been given Buy ratings by the bank. On Thursday, UBS also upgraded LVMH stock to a Buy. Deutsche Bank is also bullish on certain names in the sector, including Burberry, Hermes and LVMH.
