Hermès International Société en commandite par actions (ENXTPA:RMS) will soon bid farewell to Veronique Nichanian, its artistic director of menswear for almost forty years. The announcement sets the stage for shifts in the brand’s creative direction.
See our latest analysis for Hermès International Société en commandite par actions.
Hermès International’s share price recently bounced back, climbing 7.7% over the past week alone, although it remains down slightly for the year so far. Despite pockets of volatility, its one-year total shareholder return of 6.0% and a remarkable 73% total return over three years reflect momentum that has outpaced many luxury peers and hints at investors’ continued faith in the brand’s long-term value, even as leadership changes spark fresh debate about its creative future.
If you want to see what else luxury investors are watching, this could be the perfect moment to broaden your search and discover fast growing stocks with high insider ownership
With anticipation swirling around leadership shifts and a resilient share price, investors are left weighing a key question: does the current valuation offer room for upside, or is the market already factoring in all future growth?
Most Popular Narrative: 9.6% Undervalued
Hermès International’s fair value in the most followed narrative stands notably above the last closing price, reflecting confidence in its ability to outpace current expectations. The following direct quote shines a light on a key factor influencing this view.
Ongoing expansion of global high-net-worth individuals, especially in Asia-Pacific (for example, strong resilience in Japan and Korea, future revitalization anticipated in China), continues to broaden Hermès' core, loyal customer base and supports a sustained uplift in long-term revenue growth.
Want to know the bold assumptions driving this valuation? The narrative hinges on relentless revenue growth and margin strength rooted in a fiercely loyal clientele. Curious about what financial forecasts could justify such a premium? Dive in to uncover the numbers and logic powering this compelling fair value story.
Result: Fair Value of €2,423 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, persistent macroeconomic uncertainty and prolonged weakness in key growth markets like China could quickly challenge even the most optimistic assumptions embedded in current forecasts.
Another View: High Market Expectations Highlight Valuation Risks
While the popular narrative suggests Hermès International is undervalued, a closer look at its price-to-earnings ratio tells a different story. The company trades at 51.3x, far above both the European luxury industry average of 20.3x and its peer group at 32.2x. In fact, the number is well above its fair ratio of 31x. This suggests the market is pricing in significant growth or scarcity value.
What happens if Hermès’ earnings stumble or sentiment shifts? Is this a premium worth paying, or is there more risk here than the narrative suggests?
See what the numbers say about this price — find out in our valuation breakdown.
Build Your Own Hermès International Société en commandite par actions Narrative
If our perspective doesn’t quite align with yours or you’d rather dig into the numbers yourself, you can craft a custom narrative in under three minutes with Do it your way.
A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Hermès International Société en commandite par actions.
Looking for More Smart Investment Moves?
Ready for the next step in sharpening your portfolio? Simply Wall Street has handpicked unique opportunities you won’t want to ignore. See what you could be missing out on:
- Capture steady passive income by jumping into these 18 dividend stocks with yields > 3%, where companies offer robust yields above 3%.
- Spot tomorrow’s tech disruptors by scanning these 100+ AI penny stocks, where artificial intelligence drives growth and innovation.
- Get ahead of the crowd with these 871 undervalued stocks based on cash flows, which features stocks primed for a value bounce based on strong cash flows.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Valuation is complex, but we're here to simplify it.
Discover if Hermès International Société en commandite par actions might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com