Hermes International (RMS) AI Stock Analysis

• Market Cap: $247.69B
• Dividend Yield: 0.57%
• Average Volume (3M): 50.73K
• Price to Earnings (P/E): 53.9
• Beta (1Y): 1.39
• Revenue Growth: 12.98%
• EPS Growth: 6.62%
• Country: FR
• Employees: 24,203
• Sector: Consumer Cyclical
• Sector Strength: 68
• Industry: Luxury Goods
• EPS (TTM): 21.30
• Shares Outstanding: 105,569,410
• 10 Day Avg. Volume: 44,355
• 30 Day Avg. Volume: 50,732
• PEG Ratio: 16.46
• Price to Book (P/B): 14.50
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 48.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $2,662.41
• Price Target Upside: 12.48% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 80 Outperform
• Price Target: €2,722.00 ▲(15.00%Upside)

Hermes International's overall stock performance is strong, driven by exceptional financial health and positive earnings call insights. While technical indicators and valuation suggest caution, the company's strategic positioning and growth in key segments provide a solid foundation for future performance.

Positive Factors

Craftsmanship and Market Position

The company's artisanal approach, attention to detail, and commitment to preserving traditional craftsmanship contribute to its unique position in the luxury market.

Defensive Attributes

The defensive attributes of its leather division, continued success in Ready-to-Wear, Shoes and Jewellery, pricing power, and resilient demand from a loyal, wealthy clientele remain fundamental reasons to favour the stock in an uncertain demand environment.

Revenue Growth

Hermès achieved a firm revenue growth of 9% y/y in 1Q25, reaching EUR4.1bn, driven by strong demand across most product segments and regions despite a challenging global economic and geopolitical environment.

Negative Factors

Financial Forecast Adjustments

Sales and EBIT forecasts for Hermès have been trimmed by 2%, primarily due to adverse FX changes.

Supply Chain and Forex Risks

Risks include supply chain disruptions, unfavorable forex impacts, intensifying competition, resurgence of pandemic, and slower-than-expected tourism recovery.

Tax and Comparison Challenges

Some near-term negatives include likely low inventory levels for leather goods at the end of FY24, temporary disruption from wildfires in LA, extra €350m French taxes in 2025, and demanding comparatives.

Hermes International Business Overview & Revenue Model

Company Description

Hermès International Société en commandite par actions engages in the production, wholesale, and retail of various goods. The company offers leather goods and saddlery, such as bags for men and women, clutches, briefcases, luggage, small leather goods, diaries and writing objects, saddles, bridles, and a range of equestrian products and clothing; ready-to-wear garments for men and women; and accessories, including jewelry, belts, hats, gloves, the Internet of Things products, and shoes. It also provides silk and textiles for men and women; art of living and tableware products; perfumes; and watches. In addition, the company is also involved in weaving, engraving, printing, dyeing, finishing, and producing textiles; and purchasing, tanning, dyeing, finishing, and selling precious leathers. It sells its products through a network of 303 stores worldwide. The company also sells watches, perfumes, and tableware through a network of specialized stores. Hermès International Société en commandite par actions was founded in 1837 and is based in Paris, France. Hermès International Société en commandite par actions operates as a subsidiary of H51 SAS.

How the Company Makes Money

Hermes International generates revenue primarily through the sale of its luxury products, which are distributed through a network of directly operated stores, concessions in department stores, and online platforms. The company's key revenue streams include leather goods, which account for a significant portion of sales, followed by ready-to-wear apparel, silk and textiles, perfumes, watches, and other accessories. Hermes also benefits from its strong brand reputation and exclusivity, allowing the company to command premium pricing for its products. Additionally, Hermes maintains tight control over its supply chain and production processes, ensuring high quality and exclusivity, which further drives demand and profitability. The company also engages in strategic collaborations and partnerships to expand its market reach and enhance brand value.

Hermes International Financial Statement Overview

Summary

Hermes International demonstrates exceptional financial performance with strong revenue growth, high profitability, and robust cash flow. The balance sheet is solid with low leverage and strong equity ratios, highlighting financial stability.

Income Statement

Hermes International has shown robust revenue growth with a 12.96% increase from 2023 to 2024, reflecting strong demand in the luxury goods sector. Gross Profit Margin remains high at 70.23%, indicating efficient production and high pricing power. Net Profit Margin improved to 30.33%, showcasing enhanced profitability. EBIT and EBITDA margins are solid at 40.54% and 46.07% respectively, highlighting operational efficiency.

Balance Sheet

The company maintains a strong balance sheet with a low Debt-to-Equity Ratio of 0.13, reflecting minimal leverage risk. The Equity Ratio stands at a robust 75.06%, indicating a strong equity base and financial stability. Return on Equity is impressive at 26.56%, demonstrating effective utilization of equity to generate profits.

Cash Flow

Hermes International shows a significant increase in Free Cash Flow, with growth from the previous year, supporting strategic investments and shareholder returns. The Operating Cash Flow to Net Income Ratio of 1.12 indicates strong cash generation ability. Free Cash Flow to Net Income Ratio is high at 1.12, reflecting excellent cash conversion from profits.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.17B	13.43B	11.60B	8.98B	6.39B
Gross Profit	10.66B	9.71B	7.66B	5.89B	3.91B
EBITDA	6.99B	6.42B	5.29B	4.03B	2.53B
Net Income	4.60B	4.31B	3.37B	2.44B	1.39B
Balance Sheet
Total Assets	23.08B	20.45B	17.46B	13.85B	11.05B
Cash, Cash Equivalents and Short-Term Investments	11.64B	10.63B	9.22B	6.70B	4.73B
Total Debt	2.17B	2.06B	1.93B	1.80B	1.69B
Total Liabilities	5.75B	5.24B	5.00B	4.43B	3.66B
Stockholders Equity	17.33B	15.20B	12.44B	9.40B	7.38B
Cash Flow
Free Cash Flow	5.14B	3.58B	3.73B	2.92B	1.22B
Operating Cash Flow	5.14B	4.33B	4.25B	3.45B	1.66B
Investing Cash Flow	-1.20B	-995.00M	-646.00M	-716.00M	-453.60M
Financing Cash Flow	-3.05B	-1.79B	-1.24B	-869.00M	-810.20M

Hermes International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2367.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:RMS, the sentiment is Negative. The current price of 2367 is above the 20-day moving average (MA) of 2353.85, below the 50-day MA of 2383.28, and above the 200-day MA of 2350.02, indicating a neutral trend. The MACD of 17.70 indicates Negative momentum. The RSI at 49.56 is Neutral, neither overbought nor oversold. The STOCH value of 35.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:RMS.

Hermes International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RMS	80 Outperform	$247.69B	53.88	28.67%	0.57%	12.98%	6.62%
Sector *	62 Neutral	$16.95B	10.84	-7.26%	3.63%	1.71%	-25.14%
0NPL	―	€81.00B	15.55	22.73%	2.90%	―	―
0OMK	―	€112.62B	46.91	6.00%	1.62%	―	―
0IIH	―	€24.19B	21.36	7.52%	3.04%	―	―
0HAU	―	€236.16B	18.81	19.53%	2.75%	―	―