Hermès International Société en commandite par actions Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

It's been a good week for Hermès International Société en commandite par actions (EPA:RMS) shareholders, because the company has just released its latest yearly results, and the shares gained 7.9% to €2,186. Hermès International Société en commandite par actions reported €13b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €41.12 beat expectations, being 6.8% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Hermès International Société en commandite par actions

Following the latest results, Hermès International Société en commandite par actions' 18 analysts are now forecasting revenues of €15.1b in 2024. This would be a decent 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 6.1% to €43.76. Yet prior to the latest earnings, the analysts had been anticipated revenues of €14.8b and earnings per share (EPS) of €42.06 in 2024. So the consensus seems to have become somewhat more optimistic on Hermès International Société en commandite par actions' earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.3% to €2,138. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Hermès International Société en commandite par actions analyst has a price target of €3,000 per share, while the most pessimistic values it at €1,270. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Hermès International Société en commandite par actions' revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2024 being well below the historical 18% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.1% annually. Even after the forecast slowdown in growth, it seems obvious that Hermès International Société en commandite par actions is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Hermès International Société en commandite par actions' earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Hermès International Société en commandite par actions going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Hermès International Société en commandite par actions you should be aware of.

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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.