Christian Dior (ENXTPA:CDI): Reassessing Valuation After a Recent Share Price Recovery

Christian Dior (ENXTPA:CDI) has quietly climbed about 24% over the past 3 months, even as this year’s performance looks more muted. That gap alone is making long term investors pause and reassess.

See our latest analysis for Christian Dior.

While the year to date share price return is still slightly negative, that 24% 3 month share price gain and a modest 1 year total shareholder return of 3.3% suggest momentum has started to rebuild as investors warm to Christian Dior’s longer term prospects and potential valuation upside.

If Dior’s recent recovery has you rethinking where luxury fits in your portfolio, it could be a time to explore fast growing stocks with high insider ownership as potential next wave leaders.

Given Dior’s sizeable intrinsic value gap but only modest recent returns, is the market still underestimating its brand power and earnings potential, or is today’s share price already factoring in the next leg of growth?

Price to Earnings of 23.2x: Is It Justified?

Christian Dior last closed at €587, and its current price to earnings ratio of 23.2 times suggests investors are paying a premium for each euro of earnings compared to some peers.

The price to earnings multiple captures how much the market is willing to pay today for the company’s current earnings base. This can be a key lens for mature, profitable luxury groups. For Christian Dior, that 23.2 times figure reflects both its global brand portfolio and the market’s expectations for future profitability.

While our SWS DCF model points to material upside with the shares trading at around 49.6% below an intrinsic value estimate of roughly €1,164, the earnings multiple itself looks demanding relative to the broader European luxury industry, where the average stands at 20.5 times. However, against a tighter group of peers on 39.3 times earnings on average, Dior’s multiple appears comparatively restrained. This suggests the market may be more conservative about its earnings trajectory than for some rivals.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Earnings of 23.2x (ABOUT RIGHT)

However, slower global luxury demand, and any setback in Dior’s brand momentum or pricing power, could quickly challenge the case for a sustained rerating.

Find out about the key risks to this Christian Dior narrative.

Another View on Value

Our SWS DCF model presents a very different perspective from the current earnings multiple, indicating that Christian Dior is trading at roughly a 50% discount to its estimated fair value of about €1,164 a share. If that gap persists, are investors misinterpreting the durability of its luxury ecosystem?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Christian Dior for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 907 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Christian Dior Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a personalised view in just a few minutes: Do it your way.

A great starting point for your Christian Dior research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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