(CercleFinance.com) – HSBC raised its recommendation on Hermès shares on Monday, raising it from ‘hold’ to ‘buy’, citing mainly valuation issues.
The financial intermediary, which maintains its target price of 1,350 euros, showed an upside potential of 33%, insists on the defensive qualities of the Parisian house.
“If investors are worried about the prospects for the luxury sector in these difficult economic conditions, then Hermès is, from our point of view, a stock to hold,” he writes.
“We believe that the current valuation represents a tremendous opportunity to acquire a high quality company,” HSBC continued, adding that it considers Hermès “to be one of the most resilient companies in the sector, if not ‘is not the toughest’ in the industry.
‘In truth, Hermès tends to outperform during troubled economic times thanks to its leather goods business, for which demand outstrips supply,’ he concludes.
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