European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>€4 bn divestiture cuts Kering’s net debt to ~2× EBITDA, marking a decisive deleveraging under new CEO Luca de Meo.</li>
<li>Balance-Sheet reset buys time for Gucci’s creative relaunch; early fashion-week feedback encouraging.</li>
<li>We see moderate upside to €333–€350/share if execution sustains cost control and brand momentum.</li>
</ul>


€4 bn divestiture cuts Kering’s net debt to ~2× EBITDA, marking a decisive deleveraging under new CEO Luca de Meo.
Balance-Sheet reset buys time for Gucci’s creative relaunch; early fashion-week feedback encouraging.
We see moderate upside to €333–€350/share if execution sustains cost control and brand momentum.


Kering – Beauty Sale to L’Oréal: Deleveraging Catalyst in a Strategic Reset

Quality-first, Business-perspective, Long-term, Urbem (HK) Limited

Urbem Capital

Quality-first, Business-perspective, Long-term

Quality-first, Business-perspective Strategy

Urbem (HK) Limited

Equity Bottom-Up

<ul>
<li>Since our December 2020 Insight, Hermès has returned about 62% in euros against roughly 111% for the MSCI ACWI gross index, despite tripling its profit.</li>
<li>It led the index at every year-end through 2025; a 57.5× starting multiple, Asia's stall and luxury's pricing fatigue erased that lead within 2026.</li>
<li>For long-term luxury investors: own the top of the customer pyramid, separate price from volume, benchmark against the index, and demand an explicit expected return.</li>
</ul>


Since our December 2020 Insight, Hermès has returned about 62% in euros against roughly 111% for the MSCI ACWI gross index, despite tripling its profit.
It led the index at every year-end through 2025; a 57.5× starting multiple, Asia's stall and luxury's pricing fatigue erased that lead within 2026.
For long-term luxury investors: own the top of the customer pyramid, separate price from volume, benchmark against the index, and demand an explicit expected return.


Hermès Revisited: Profits Tripled, Yet the World Index Won

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.</li>
<li>Our bullish near-term outlook will remain in place as long as the 4+ month uptrend continues on ACWI-US. Remain aggressively long/continue to expect more upside into year-end and the early2026.</li>
<li>Europe's EURO STOXX 50 is breaking out from its 7-month base, above the crucial 5500 level, and RS is attempting to reverse its 5-month downtrend -- buy.</li>
</ul>


We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.
Our bullish near-term outlook will remain in place as long as the 4+ month uptrend continues on ACWI-US. Remain aggressively long/continue to expect more upside into year-end and the early2026.
Europe's EURO STOXX 50 is breaking out from its 7-month base, above the crucial 5500 level, and RS is attempting to reverse its 5-month downtrend -- buy.


Europe Breaking Out From 7-Month Base -- Buy; Remain Overweight Taiwan, China, Korea, and the U.S.

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>68.2% of global equity funds are positioned ahead of the benchmark in France, with an average overweight of 2%, making it the second largest country overweight after the UK.</li>
<li>France is currently the second largest country overweight after the UK, effectively offsetting some of the underweights in the USA, China &amp; Hong Kong, and Australia.</li>
<li>Overweights driven by by Schneider Electric, L'Oreal, and LVMH, whilst Pernod Ricard and Sanofi see investor outflows.</li>
</ul>


68.2% of global equity funds are positioned ahead of the benchmark in France, with an average overweight of 2%, making it the second largest country overweight after the UK.
France is currently the second largest country overweight after the UK, effectively offsetting some of the underweights in the USA, China &amp; Hong Kong, and Australia.
Overweights driven by by Schneider Electric, L'Oreal, and LVMH, whilst Pernod Ricard and Sanofi see investor outflows.


France:  Global Funds Overweight Ahead of Snap Election

<ul>
<li>Global equity managers are positioned at their highest ever overweight in French equities</li>
<li>France is the 4th largest country allocation globally and the largest in the European Union. Versus the benchmark, only the Netherlands has more funds positioned overweight.</li>
<li>Sanofi and Cap Gemini SA have benefited from fund rotation this year, with the percentage of funds invested in each name rising by 4.1% and 3.3% respectively</li>
</ul>


Global equity managers are positioned at their highest ever overweight in French equities
France is the 4th largest country allocation globally and the largest in the European Union. Versus the benchmark, only the Netherlands has more funds positioned overweight.
Sanofi and Cap Gemini SA have benefited from fund rotation this year, with the percentage of funds invested in each name rising by 4.1% and 3.3% respectively


France: Europe’s High Conviction Holding

France

Kering SA designs, manufactures and markets luxury and sport & lifestyle goods. The Company's brands include Gucci, Bottega Veneta, Alexander McQueen, Puma and Volcom. Kering operates globally and is headquartered in Paris, France.

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Kering (KER FP)

Kering – Beauty Sale to L’Oréal: Deleveraging Catalyst in a Strategic Reset

Kering’s €4 bn beauty sale to L’Oréal signals CEO de Meo’s pivot from expansion to repair—reducing debt, restoring discipline, and buying time for...

Jesus Rodriguez Aguilar

Hermès Revisited: Profits Tripled, Yet the World Index Won

Hermès tripled its profit after our 2020 Insight, yet trails the MSCI ACWI by about 49 points of total return. Why the best luxury house lagged the...

Urbem Capital

Europe Breaking Out From 7-Month Base -- Buy; Remain Overweight Taiwan, China, Korea, and the U.S.

Europe EURO $STOXX 50 Breaking Out From 7-Month Base -- Buy; Remain Overweight Taiwan $EWT, China $MCHI, Korea $EWY, and the U.S. $SPX; Bullish...

Vermilion Research

France: Global Funds Overweight Ahead of Snap Election

Global equity fund managers are entering the French election with an overweight position compared to the SPDRs MSCI ACWI ETF benchmark

Steven Holden

France: Europe’s High Conviction Holding

Global equity funds are at record overweights in French equities. Average weights are towards the top end of the 8-year range at 4.16%, pushing net...

Steven Holden

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