Deutsche Bank has cut its price target on Hermes to €1,920 from €2,320 and trimmed LVMH's to €590 from €600, but kept Buy ratings on both.
It comes as part of a second-quarter review of the European luxury sector that reprices the broker's coverage.
Analyst Do-Hyun Yoo said the quarter brought only limited improvement in sentiment towards European luxury names, with share-price performance across the sector diverging further.
DB raised its target on Kering, the French luxury group behind Gucci and Saint Laurent, to €295 from €280 with the Hold rating unchanged.
Moncler, the Italian luxury outerwear group, moved to €57 from €58 at Hold.
The German bank's sector calls see three persistent headwinds; the lack of a meaningful economic recovery in China, a drag of roughly 100 basis points on growth from the Middle East; and continued pressure on aspirational consumers. And, DB sees no clear catalyst on the horizon to ease those pressures across the sector.
As such, according to analysts, the sector's winners remain those that are relatively insulated from the headwinds, and Yoo expects the same pockets of resilience to keep outperforming.
In particular, the analyst singled out jewellery, and Richemont in particular; high-end ready-to-wear, exemplified by Brunello Cucinelli; and turnaround stories such as Burberry.
