Hermes International (FR:RMS)
:RMS
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Hermes International
(RMS)
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Rating:73Outperform
Price Target:
€1,941.00
▲(11.49% Upside)
Action:UpgradedDate:04/20/26
The score is driven primarily by exceptional financial performance (industry-leading margins, returns, and cash generation) and a generally positive earnings outlook supported by continued investment and pricing actions. Offsetting these strengths are weak technical momentum (below key moving averages with negative MACD) and a stretched valuation (high P/E and low yield), which reduce near-term risk-adjusted appeal.
Positive Factors
Elite margins and profitability
Sustained, best-in-class margins indicate durable pricing power, strong product mix and tight cost control. High margins support reinvestment, capacity funding and dividend policy, making underlying earnings resilient to moderate volume swings over the next several quarters.
Negative Factors
Material FX headwinds
Persistent currency impacts materially pressure reported revenue, recurring operating income and cash flow. Given significant international sales, continued FX weakness can compress margins and complicate planning, making near-to-medium-term results more volatile.
Read all positive and negative factors
Positive Factors
Negative Factors
Elite margins and profitability
Sustained, best-in-class margins indicate durable pricing power, strong product mix and tight cost control. High margins support reinvestment, capacity funding and dividend policy, making underlying earnings resilient to moderate volume swings over the next several quarters.
Read all positive factors
Hermes International (RMS) vs. iShares MSCI France ETF (EWQ)
Market Cap
€173.81B
Dividend Yield1.24%
Average Volume (3M)83.39K
Price to Earnings (P/E)24.4
Beta (1Y)1.35
Revenue Growth5.48%
EPS Growth-1.76%
CountryFR
Employees24,203
SectorConsumer Cyclical
Sector Strength84
IndustryLuxury Goods
Share Statistics
EPS (TTM)43.15
Shares Outstanding105,569,410
10 Day Avg. Volume117,694
30 Day Avg. Volume83,389
Financial Highlights & Ratios
PEG Ratio-27.69
Price to Book (P/B)11.80
Price to Sales (P/S)13.90
P/FCF Ratio50.38
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€2,158.73Price Target Upside23.99% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)44.86
Revenue Forecast (FY)€16.89B
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 g...
How the Company Makes Money
Hermès makes money primarily by selling luxury goods at premium price points, supported by brand equity, craftsmanship positioning, and tightly controlled supply and distribution.
Key revenue streams:
1) Direct retail sales (primary): The largest...
Hermes International Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 24, 2026
Earnings Call Sentiment Positive
The call presents a broadly positive performance: robust top-line growth (EUR 16bn+), strong margin expansion, solid cash generation, continued investment in production and retail capacity, and significant job creation and CSR progress. Notable headwinds include an adverse currency impact (~EUR 500m), underperformance in Perfume & Watches, a material exceptional French tax burden (~EUR 330m), and investor concerns around balancing volume expansion with brand desirability. On balance, the positive financial results, cash strength, and strategic investments outweigh the lowlights, though near-term uncertainty (FX, China early‑year trends) warrants monitoring.Positive Updates
Revenue Growth and Scale
Group revenue exceeded EUR 16.0 billion in FY2025, up 9% at constant exchange rates and 5.5% at current exchange rates, with Q4 sales of EUR 4.1 billion (+10% at constant exchange rates).
Negative Updates
Perfume & Watches Underperformance
Perfume & Beauty revenue declined by 8% in 2025; Watches declined by 2% (weak first half, recovery in H2). Perfume performance was influenced by wholesale/duty-free distribution dynamics and partner inventory management.
Read all updates
Q4-2025 Updates
Positive
Negative
Revenue Growth and Scale
Group revenue exceeded EUR 16.0 billion in FY2025, up 9% at constant exchange rates and 5.5% at current exchange rates, with Q4 sales of EUR 4.1 billion (+10% at constant exchange rates).
Read all positive updates
Company Guidance
Hermès said its outlook for 2026 is unchanged and that it will “stay the course,” pursuing momentum through continued investment in production capacity and selective retail expansion (opening the 25th leather workshop in Gironde in 2026 and new maisons including Beijing, Geneva and New Bond Street). Management flagged a targeted price increase of about 5–6% for 2026 to help offset rising production costs (including a €120 general wage uplift in France and a €3,000 bonus for ~26,000 employees) but warned of an unfavorable FX impact of roughly €200m expected in 2026 (after a c.€500m negative FX effect in 2025). It reiterated strong 2025 fundamentals to underpin the plan: revenue >€16bn (+9% at constant exchange rates; Q4 €4.1bn, +10% CER), recurring operating income €6.6bn (+7%), recurring operating margin 41%, operational investments €1.2bn, adjusted free cash flow €3.9bn and a net cash position of €12.8bn; the Board will propose an ordinary dividend of €18 per share (≈39% payout ex‑exceptional contribution).Hermes International Financial Statement Overview
Summary
Income Statement
93
Very Positive
Balance Sheet
84
Very Positive
Cash Flow
88
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 16.00B | 15.17B | 13.43B | 11.60B | 8.98B |
| Gross Profit | 11.38B | 10.66B | 9.71B | 7.66B | 5.89B |
| EBITDA | 7.50B | 6.99B | 6.67B | 5.29B | 4.03B |
| Net Income | 4.52B | 4.60B | 4.31B | 3.37B | 2.44B |
Balance Sheet | |||||
| Total Assets | 24.32B | 23.08B | 20.45B | 17.46B | 13.85B |
| Cash, Cash Equivalents and Short-Term Investments | 12.50B | 11.64B | 10.63B | 9.22B | 6.70B |
| Total Debt | 2.35B | 2.17B | 2.06B | 1.93B | 1.80B |
| Total Liabilities | 5.47B | 5.75B | 5.24B | 5.00B | 4.43B |
| Stockholders Equity | 18.84B | 17.33B | 15.20B | 12.44B | 9.40B |
Cash Flow | |||||
| Free Cash Flow | 4.42B | 4.23B | 3.70B | 3.84B | 3.05B |
| Operating Cash Flow | 5.45B | 5.17B | 4.44B | 4.25B | 3.45B |
| Investing Cash Flow | -1.35B | -1.23B | -1.11B | -646.00M | -716.00M |
| Financing Cash Flow | -3.14B | -3.05B | -1.79B | -1.24B | -869.00M |
Hermes International Technical Analysis
Neutral
1741.00
Price Trends
1877.02
Negative
1997.47
Negative
2076.23
Negative
Market Momentum
-41.27
Negative
48.42
Neutral
54.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:RMS, the sentiment is Neutral. The current price of 1741 is above the 20-day moving average (MA) of 1684.93, below the 50-day MA of 1877.02, and below the 200-day MA of 2076.23, indicating a neutral trend. The MACD of -41.27 indicates Negative momentum. The RSI at 48.42 is Neutral, neither overbought nor oversold. The STOCH value of 54.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FR:RMS.
Hermes International Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | €173.81B | 24.42 | 25.52% | 1.24% | 5.48% | -1.76% | |
64 Neutral | €80.32B | 12.43 | 19.54% | 2.33% | -4.58% | -13.00% | |
63 Neutral | €234.09B | 15.49 | 16.39% | 2.06% | -4.58% | -12.97% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | €404.13M | 22.66 | 1.30% | ― | 0.47% | ― | |
54 Neutral | €30.14B | -23.01 | 0.49% | 2.03% | -14.65% | -93.64% |
* Consumer Cyclical Sector Average
FR:RMS
Hermes International
1,661.00
-852.67
-33.92%
FR:CDI
Christian Dior
445.20
-33.53
-7.00%
FR:KER
Kering SA
245.90
58.31
31.08%
FR:MC
LVMH Moet Hennessy Louis Vuitton
472.70
-44.82
-8.66%
FR:SMCP
SMCP S.A.S.
5.17
1.45
38.98%
FR:DPT
ST Dupont SA
0.09
-0.02
-15.53%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.