Buy these 'cheap' stocks, Barclays says, as luxury's 'self-help stories' pay off

The conflict in the Middle East has weighed heavily on the world's biggest luxury stocks , but Barclays sees a buying opportunity with the sector now offering the best value in a decade. Barclays sees upside in "self-help stories" such as LVMH and Gucci-owner Kering , as well as "favors companies" with higher exposure to the jewelry and American consumers, the bank wrote in a note published on Monday. It came as Barclays transfers coverage of luxury stocks to analyst Viktoria Petrova, who predicts the sector will return to about 3% revenue growth this year, then stabilize at 4% growth through 2029. Bullish analysts hope 2026 will offer an inflection point for luxury stocks, with the sector returning to growth after four years of contraction. Concerns over a slowdown in current and future organic growth have left sector valuation multiples "well below their past decade average," Barclays noted. "Luxury's growth model has entered a new phase," it added. "The recent slowdown underscores a shift in consumer behavior and calls for a rethink of established strategic playbooks." Disruption from the Iran war is weighing on spending by luxury consumers in the Middle East, formerly one of the sector's few bright spots amid sluggish growth in former growth driver China and in Europe. Inflation risks and a more selective consumer have also added to the sector's woes. …