(CercleFinance.com) – The Hermès share has posted a gain of nearly 75% since January 1, 2021. It recorded the second best performance of the CAC40 over the year after Societe Generale.
Oddo BHF reaffirmed its ‘outperformance’ opinion on Hermès International and raised its price target from 1,406 to 1,660 euros, after an analysts meeting organized by the luxury house ‘to better explain the group’s fundamentals and their uniqueness’.
The research department notes that Hermès reiterated its conservative message on profitability as it stood, but more explicitly quantified its objective of organic growth in the activity, aiming at ‘double-digit’ annual growth.
The design office is updating its turnover forecasts, to levels now close to consensus, but without visibly improving margins, thus leading it to raise its operational profit forecasts (EBIT) by + 3.5% for 2022 and + 5.5% for 2023.
Invest Securities, on the other hand, confirmed its recommendation to sell with a target lowered to 975 E (instead of 991 E) in its latest study on the stock.
The analyst recalls that the turnover published by Hermès for the 3rd quarter of 2021 has again happily exceeded expectations, with organic growth of + 31% (+ 40% over 2 years) against + 22.5% projected by the Factset consensus (IS + 20.5%).
Invest Securities emphasizes that all geographic areas have participated in this remarkable development as well as each of the businesses. The analyst has a particular mention for Europe which is stronger than the group’s growth with a masterful + 40% in organic terms and + 19% over 2 years.
‘Hermès remains an icon of luxury but the leather goods model is not free from flaws even if its audience justifies the continued expansion of its network (less dense than that of LV?) With a culture of mono-product tendency of such as to limit the sources of growth. If this purity of the model is a strength, the evaluation remains dissuasive while Hermès does not seem in any way to want to evolve, in particular in terms of external growth ‘indicates the analysis office.
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