Hermes International SA

RMS: XPAR (FRA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
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Hermes: Resilience During Industry Downturn, but Priced Into the Shares

Jelena Sokolova

Oct 24, 2024

We are maintaining our fair value estimate for wide-moat Hermes after the company reported solid third-quarter revenue figures, with the industry downturn having a limited impact on its peers. Hermes is widely and rightly regarded as a safe haven in luxury at the moment, although we remain cautious on the valuation. Demand for its products remains resilient and pricing is boosting revenue. However, we believe Hermes could have less upside in the industry recovery scenario given its supply constraints. At 13 times forward revenue (3.5 times for luxury peers), investors are overpaying for resilience in our view.

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Hermes International SA

Hermes: Resilience During Industry Downturn, but Priced Into the Shares

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