Hermès International reflects attractive technical aspects that could allow investors to expect a trend reversal over the medium term.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
Strengths
● The company's profit outlook over the next few years is a strong asset.
● The company's EBITDA/Sales ratio is relatively high and results in high margins before depreciation, amortization and taxes.
● The group's activity appears highly profitable thanks to its outperforming net margins.
● Thanks to a sound financial situation, the firm has significant leeway for investment.
● Considering the small differences between the analysts' various estimates, the group's business visibility is good.
● The group usually releases upbeat results with huge surprise rates.
Weaknesses
● With an expected P/E ratio at 50.55 and 44.6 respectively for both the current and next fiscal years, the company operates with high earnings multiples.
● Based on current prices, the company has particularly high valuation levels.
● In relation to the value of its tangible assets, the company's valuation appears relatively high.
● The valuation of the company is particularly high given the cash flows generated by its activity.
● The company is not the most generous with respect to shareholders' compensation.
● For the last twelve months, the trend in sales revisions has been clearly going down, which emphasizes downgraded expectations from the analysts.
● Most analysts agree on a negative opinion with regard to the stock. Indeed, the average consensus issues recommendations to underperform or sell.
● Over the past twelve months, analysts' consensus has been significantly revised downwards.
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Hermès International specializes in the design, manufacturing, and marketing of luxury products. Net sales break down by family of products as follows:
- leather and saddlery goods (42.6%): purses, luggage, small leather goods, planners, writing items, saddles, bridles, riding objects and clothing, etc.;
- clothes, shoes, and accessories (29%);
- silk and textile products (6.3%);
- clock and watchmaking articles (3.8%);
- perfumes and beauty products (3.5%);
- other (14.8%): mainly jewelry and home decoration products.
At the end of 2024, the group had a network of 294 stores worldwide.
Net sales are distributed geographically as follows: France (9.5%), Europe (14.2%), Japan (9.5%), Asia-Pacific (43.8%), Americas (18.9%) and others (4.1%).
This super rating is the result of a weighted average of the rankings based on the following ratings: Global Valuation (Composite), EPS Revisions (4 months), and Visibility (Composite). We recommend that you carefully review the associated descriptions.
Investor
Investor
This super composite rating is the result of a weighted average of the rankings based on the following ratings: Fundamentals (Composite), Global Valuation (Composite), EPS Revisions (1 year), and Visibility (Composite). We recommend that you carefully review the associated descriptions.
Global
Global
This composite rating is the result of an average of the rankings based on the following ratings: Fundamentals (Composite), Valuation (Composite), Financial Estimates Revisions (Composite), Consensus (Composite), and Visibility (Composite). The company must be covered by at least 4 of these 5 ratings for the calculation to be performed. We recommend that you carefully review the associated descriptions.
Quality
Quality
This composite rating is the result of an average of the rankings based on the following ratings: Capital Efficiency (Composite), Quality of Financial Reporting (Composite), and Financial Health (Composite). The company must be covered by at least 2 of these 3 ratings for the calculation to be performed. We recommend that you carefully review the associated descriptions.
