** Berenberg says valuations for luxury companies are at risk, citing structural pressures with key consumers such as Chinese and younger customers

** "We remain bearish on the outlook for the luxury sector and see downside risk to revenue estimates," Berenberg says

** The brokerage prefers absolute luxury brands over aspirational ones, warning that a return to past margins could drag price-to-earnings multiples back down to previous norms

** It retains a "buy" rating on French group Hermes HRMS.PA and Italian fashion brand Brunello Cucinelli BCU.MI due to their superior growth dynamics

** Berenberg expects medium-term revenue growth of 3-4% annually for the sector versus a 6-7% consensus estimate, which could trigger a significant margin squeeze

** Stoxx Europe Luxury 10 index .STXLUXP is down 16.2% YTD