Kering is launched from Europe’s best blue chip index as defence giant Rheinmetall boosted by continental war footing
The past few years have been a booming period for defense companies, and the opposite is true for luxury companies.
result? German arms maker Rheinmetall will soon become part of the benchmark for the largest listed European company, the Euro Stoxx 50, which will soon replace Gucci’s owner Kering.
The change occurred on June 20th, and Stoxx Group, which manipulates the index, was confirmed in an email notification Quote by Bloomberg on tuesday.
Other members of the Euro Stoxx 50 include LVMH, Novo Nordisk, and Mercedes-Benz.
JP Morgan analyst Pankaji Gupta references the index’s company reshuffle in a memo starting May 22, highlighting that Deutsche Bank and energy company Siemens are likely to be added over the year as well.
This move is not surprising given that Rheinmetall’s stock surged 250% last year amid massive European and global developments. The Dusseldorf-based company has announced it has received a massive ammunition order Early todayhighlights the growing demand for weapons.
Rheinmetall, which also supplies auto parts, expects its operating profit to increase by 61%. 1.5 billion euros last year. The arms companies benefit from US President Donald Trump’s shaking stance against Ukraine and European allies, paving the way for a drive to re-armed drive.
Rheinmetall CEO Armin Papperger hopes that the order will expand by 450% over the next five years, he told the German outlet Handelsblatt April.
Much of Rheinmetall’s success has been a recent phenomenon. Since the Ukrainian War began in February 2022, its share has risen by 1,800%. March 2023 The weapons maker has become part of DAX, the German benchmark index of 40 blue chip companies.
Meanwhile, the luxury sector, and in fact, Kaling, has no heyday. French conglomerates face a Long-term slump And an internal crisis against some of its biggest brands. Kering sales fell 12% 17.2 billion euros In 2024, Gucci, the most favorable brand, fell 23%. US Tariffs It’s even more complicated Kering’s burning business is not planned to increase production in the US.
Kering’s shares are down 47.4% from last year.
If that’s Kering’s comfort, it’s not the first company to be launched from a stock index than an inactive performance. Last September, Burberry, a British luxury company known for its iconic check patterns, was kicked out of London’s FTSE100 index. 15 years in a row.
Trench coat makers were also struggling to slow performance, especially as their appetite for luxury goods, in China, began to fade amid economic pressure.
Burberry has launched a cost-cutting strategy following major leadership changes, inspiring hope Possible returns To FTSE 100 index. But that hasn’t happened yet.
In recent months, the best-performing stocks in the Euro Stoxx 50 include other companies that dabble in defense, such as Safran and Airbus.
Stoxx, Rheinmetall, and Kering didn’t return anytime soon Fortune Request a comment.
This story was originally introduced Fortune.com