'Long-term opportunity': Morningstar analyst names 2 luxury stocks to buy right now

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Amid a broad sell-off in luxury stocks, one Morningstar analyst sees promise in the sector, revealing her top picks.

"The luxury sector has been quite richly valued for the last couple of years," Jelena Sokolova, senior equity analyst at Morningstar, told CNBC Pro. She said that amid the broad sell-off, "opportunities will start to emerge for longer-term investors who are willing to look through this cycle." The downward turn in luxury stocks kicked off in June when industry bellwether LVMH reported lower-than-expected second-quarter sales .

mountain GLUX "The luxury sector is ... going sideways after experiencing years of strong growth," Sokolova said. "Demand is not as strong anymore, so the shares have sold off quite a bit. Companies are typically quite expensive on the multiple side, but they have historically delivered growth and their profitability is quite good." Referencing luxury downcycles over the past three decades, the equity analyst noted that they typically last one or two years.

 

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