Hermès: Price Target Achieved, And More (Rating Downgrade)

2025-04-02 15:02:40 ET

Summary

• Hermès was one of the few luxury stocks rated Buy last November due to its robust fundamentals and favourable market multiples.
• The stock price has surged by over 20%, since far exceeding the initially projected 12% increase. This can be explained by the company's exceptional results compared with peers.
• But with the risk of continued weakness in the market and the stock's far more elevated valuations, it's hard to justify a sustained Buy rating.

When I last wrote about the French luxury company and stock Hermès ( HESAY ) ( HESAF ) in November 2024, it stood out among luxury stocks for its fundamentals. It was among the only stocks in the sector to merit a Buy rating. This has come to pass. Since then, it's up by over 20%. Even year-to-date [YTD], the stock is up by 9%, compared to the ~5% drop in the S&P Global Luxury Index during this time....

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