Evaluating Christian Dior's Valuation Following Recent Surge in Share Price

Recent Share Performance: Christian Dior's shares have increased by 17.2% in the last month and 21.6% over the past three months, although the 1-year total shareholder return remains slightly negative, indicating a potential rebuilding of momentum.

Valuation Insights: The company's price-to-earnings (P/E) ratio is 22.6x, which is below direct peers but above the sector average, suggesting that while investors may expect strong future growth, there is skepticism about sustaining past profit growth rates.

DCF Valuation: A discounted cash flow (DCF) model estimates Christian Dior's fair value at €1,160.6, significantly higher than its current market price of €570, indicating potential undervaluation based on future cash flows.

Investment Considerations: The analysis highlights the importance of understanding risks associated with luxury market demand and earnings momentum, while also encouraging investors to explore undervalued stocks and growth opportunities.