RBC Capital's Recommended Top Luxury Stocks for 2026

Investing.com – As luxury brands adapt to changing consumer preferences and technological innovations by 2026, RBC Capital Markets has identified the standout performers in the sector. Their analysis reveals which companies have the greatest growth potential amid evolving market dynamics and regional consumer spending differences.

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EssilorLuxottica reported outstanding Q4 2025 results, with revenue 6% above market expectations and currency-adjusted growth reaching an impressive 18%. This performance was mainly driven by strong professional solutions and North American operations. The company’s AI glasses partnership with Meta contributed about 15 percentage points to organic growth in Q4, with over 7 million units sold in 2025. The current trading in January 2026 maintains double-digit growth momentum, though at a potentially lower rate than Q4. The company’s Stellest myopia control lenses are being early promoted in the U.S., with plans for significant expansion beyond the current 4,000 stores. Its optical retail subscription model now accounts for 22% of EMEA optical retail revenue, continuing to drive growth, customer loyalty, and consumer spending.

EssilorLuxottica is facing a patent infringement lawsuit from Solos Technology regarding its smart glasses technology. Additionally, Kepler Cheuvreux upgraded the company’s stock rating from Hold to Buy, with a target price raised to €350.

Hermès announced that Q4 2025 / FY 2025 revenue exceeded market expectations by 1%, with all segments except fragrances surpassing forecasts. The company achieved an operating profit of €6.57 billion in FY 2025 (margin 41.1%), 3% above market estimates, driven by better-than-expected gross margins. Management reaffirmed a long-term sales and pricing growth target of 6-7%, with prices expected to rise slightly more in FY 2026 (around 6%) to offset costs and wage inflation. Although the Chinese New Year timing makes current trading trends hard to assess, management confirmed growth across all regions. Inventory levels remain “comfortable” across regions and categories, especially in leather goods. The company continues to pursue a vertical integration strategy, planning to open a new leather workshop in 2026, with two more expected in 2027 and 2028.

Kering reported Q4 2025 / FY 2025 revenue 2% above market expectations, with all brands slightly exceeding forecasts. New CEO Luca De Meo made a positive debut, outlining the company’s strategic direction; full details are expected at the April 16, 2026, Capital Markets Day. Kering’s FY 2026 financial framework aims to restore revenue growth and profit margin expansion, alleviating market concerns. While visibility for Kering is improving, the stock story depends on a broader recovery in luxury demand and strong client recognition of Demna’s creative direction at Gucci. In a scenario of moderate luxury recovery in 2026, Kering could be a major beneficiary given its more fashion-forward product portfolio compared to peers.

Recently, Kering announced that its Bottega Veneta CEO will step down at the end of Q1 2026. The luxury group also formed a joint venture with investment firm Ardian for a property on Fifth Avenue in New York.

Pandora’s Q4 2025 / FY 2025 results were in line with preliminary data, but its FY 2026 organic growth guidance of “-1% to +2%” was about 300 basis points below market expectations. The EBIT margin guidance of 21-22% roughly met expectations. New CEO Berta de Pablos Barbier outlined a strategy to revitalize core products through more distinctive collections and media attention. The launch of new platinum-plated products (Evershine series) was confirmed as encouraging. For FY 2026, Pandora has hedged 95% of its sales costs to protect margins. Key debate centers on profit margin prospects for 2026, as the company shifts toward platinum-plated products.

Pandora partnered with the popular Netflix series “Bridgerton” to launch a new jewelry collection.

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