We are maintaining our fair value estimate of EUR 1,480 for wide-moat Hermes as the company reported strong, but decelerating revenue trends in the second quarter with some margin pressure. We are reducing our expectations for 2024 revenue growth and profits. Despite Hermes’ resilience during the industry downturn, shares look expensive.
Hermes benefits from unique positioning in the leather goods segment, supported by a supply/demand mismatch for its iconic bags.
Hermes expands production capacity in leather goods by around 6%-7% a year and could run into an overcapacity situation, should demand unexpectedly turn.
|
Metric
|
RMS
|
KER
|
MC
|
|---|---|---|---|
Price/Earnings (Normalized) | 45.28 | 16.27 | 22.63 |
Price/Book Value | 14.44 | 2.34 | 5.03 |
Price/Sales | 15.30 | 1.89 | 3.81 |
Price/Cash Flow | 40.80 | 9.19 | 14.47 |
|
Metric
|
RMS
|
KER
|
MC
|
|---|---|---|---|
Quick Ratio | 3.07 | 0.69 | 0.59 |
Current Ratio | 4.11 | 1.38 | 1.38 |
Interest Coverage | 96.00 | 6.57 | 18.54 |
|
Metric
|
RMS
|
KER
|
MC
|
|---|---|---|---|
Return on Assets (Normalized) | 23.57% | 5.47% | 10.45% |
Return on Equity (Normalized) | 32.07% | 14.50% | 24.35% |
Return on Invested Capital (Normalized) | 26.53% | 7.76% | 15.27% |
|
1-Day Chart
|
Name
|
Price
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|---|
| Lvmh Moet Hennessy Louis Vuitton SE
LVMHF
| — | Frwrh | $359.4 Bil | |||
| Lvmh Moet Hennessy Louis Vuitton SE ADR
LVMUY
| Hrhcryzp | Pvlgf | $353.4 Bil | |||
| Hermes International SA ADR
HESAY
| Rclfrdnfh | Lkhy | $235.8 Bil | |||
| Hermes International SA
HESAF
| — | Kyj | $227.8 Bil | |||
| Christian Dior SE
CHDRF
| — | Sbnpc | $121.3 Bil | |||
| Christian Dior SE ADR
CHDRY
| — | Zfjk | $121.3 Bil | |||
| The Swatch Group AG ADR
SWGAY
| Dxxhjwmz | Ljkwbq | $10.3 Bil | |||
| Tapestry Inc
TPR
| Nhgytspxc | Kqmfhx | $9.4 Bil | |||
| Capri Holdings Ltd
CPRI
| Zvypghwk | Gdf | $4.0 Bil | |||
| The RealReal Inc
REAL
| Tzjxf | Dlnf | $365.6 Mil |
