Hermès: fall of 5%, an analyst is no longer buying

(CercleFinance.com) – The title fell by more than 5% at the end of the day after a decline of -3.8% Friday and -4.7% Thursday (-13.6% in three sessions).

UBS announced Monday that it had reduced its recommendation on the Hermès International share from ‘buy’ to ‘neutral’ after the stock market surge signed by the luxury house in 2021.

In a research note, the broker recalls that the share price of the leather goods manufacturer jumped 75% last year, a performance which means that the title is now traded on the basis of a premium of around 80% compared to its closest peers, compared to an average of 64% over five years.

‘During the past financial year, Hermès sales surprised on the upside with an accumulated organic growth of more than 30% while its historical performance is in the 20% zone,’ he underlines.

This dynamism, combined with market share gains, has enabled the group to improve its profitability in a ‘significant’ way, argues the broker, a level that it does not see being maintained due to the significant investments currently made by the group.

UBS – which, however, raises its price target to 1,610 euros against 1,475 euros previously – now says it has reached a better entry point on the value.

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