European consumer stocks have lagged global equities for more than a year, a slide that has erased gains accumulated over the previous decade and left parts of the sector materially cheaper, according to Barclays.
The bank identifies an opportunity set within luxury goods as price-to-earnings multiples have pulled back. Barclays notes that the Consumer Discretionary and Consumer Staples sectors in Europe now trade close to the bottom of their 20-year historical price-to-earnings ranges. Positioning in the broader consumer complex has fallen markedly, with consumer durables, retail and leisure among the least crowded areas in Europe.
Barclays highlights additional signals of sector stress: only around one-third of European consumer durables and apparel companies still display positive earnings-per-share momentum, a level that approaches multi-year lows. While that underpins the sector-wide de-rating, the bank also points out that luxury valuations are not deeply depressed on a longer-term basis, implying there may be limited downside protection from valuation multiples alone.
Barclays' top European luxury picks
- LVMH - Barclays expects an acceleration in growth beginning in the second quarter of 2026, a shift it attributes primarily to easier year-on-year comparables. The bank cites potential upside from recoveries at Tiffany and at Dior that could support additional growth in subsequent years. Barclays values LVMH at approximately 20 times 12-month forward price-to-earnings and views that level as an attractive entry point. In corporate updates, LVMH reported first-quarter 2026 revenue of EUR 19.1 billion, a 6 percent decline in reported growth, and disclosed a definitive agreement to sell the Marc Jacobs brand to WHP Global.
- Richemont - Rated Overweight by Barclays, Richemont is described as the clear market leader in jewelry, which the bank regards as the fastest-growing segment within luxury goods. Barclays highlights Richemont's cost discipline and pricing power, and notes the stock still trades below its 10-year average on a 12-month forward price-to-earnings basis.
- Burberry - Barclays continues to favour Burberry as an attractive self-help opportunity. The bank points to improving momentum in Burberry's core Chinese market as a reason for its positive stance.
- Moncler - Barclays expects Moncler to outpace the wider luxury sector supported by robust growth driven in part by space expansion. The bank specifically highlights the United States as an important growth market for Moncler, where the brand currently has relatively less exposure compared with some peers.
- Prada - Prada is noted for resilient growth across its flagship brands Prada and Miu Miu, with an additional turnaround potential tied to Versace. Barclays also flags Prada's valuation as especially compelling, observing that the stock trades more than 50 percent below its 10-year average.
Barclays' selections reflect a mix of company-specific dynamics and broader valuation moves across European consumer sectors. The bank's list focuses on market leadership, geographic expansion potential, cost and pricing advantages, and pockets of improving demand, particularly in China and the United States. At the same time, Barclays reiterates that, despite cheaper near-term multiples, luxury valuations on a long-run basis have not reached levels that would signal a deep value cushion.