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Hermes International
(OTC:RMS)
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Rating:77Outperform
Price Target:
€1,712.00
▲(4.20% Upside)
Action:Reiterated
Date:07/30/26
The score is driven primarily by elite financial performance (high margins, strong cash generation, and strong balance-sheet capacity) and a largely constructive earnings update with continued investment and resilient growth at constant FX. The main offsets are weak technical positioning (price below major moving averages) and a premium valuation (high P/E with only a modest dividend yield).
Positive Factors
Elite profitability and margins
Consistently very high gross and operating margins reflect durable pricing power, tight control of distribution and in‑house craftsmanship. That structural margin advantage supports reinvestment, shareholder returns and resilience across cycles, underpinning long‑term earnings durability.
Negative Factors
Step‑up in total debt
The rise in absolute debt reduces the previously ultra‑conservative balance‑sheet profile and modestly increases leverage risk. If sustained, higher debt could constrain flexibility for opportunistic buybacks or require more careful liquidity management amid rising investments and geopolitical volatility.
Read all positive and negative factors
Positive Factors
Negative Factors
Elite profitability and margins
Consistently very high gross and operating margins reflect durable pricing power, tight control of distribution and in‑house craftsmanship. That structural margin advantage supports reinvestment, shareholder returns and resilience across cycles, underpinning long‑term earnings durability.
Read all positive factors
Hermes International (RMS) vs. iShares MSCI France ETF (EWQ)
Market Cap
€165.28B
Dividend Yield1.2%
Average Volume (3M)80.36K
Price to Earnings (P/E)36.6
Beta (1Y)1.46
Revenue Growth2.75%
EPS Growth0.80%
CountryFR
Employees27,107
SectorConsumer Cyclical
Sector Strength84
IndustryLuxury Goods
Share Statistics
EPS (TTM)43.09
Shares Outstanding105,569,410
10 Day Avg. Volume68,561
30 Day Avg. Volume80,360
Financial Highlights & Ratios
PEG Ratio-27.70
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
€1,856.73Price Target Upside13.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)44.64
Revenue Forecast (FY)€16.80B
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, travel articles, small leather goods and acces...
How the Company Makes Money
Hermès primarily makes money by selling luxury goods under the Hermès brand, with revenue largely generated through product sales in its directly operated retail network (Hermès-owned stores and brand-controlled e-commerce) where it captures retai...
Hermes International Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 11, 2027
Earnings Call Sentiment Positive
The call presented a predominantly positive operating and financial performance: resilient top-line growth with Q2 acceleration, an exceptionally high operating margin (41%), strong cash conversion and a robust balance sheet, alongside ongoing investments in production capacity and retail. Key challenges are material: significant FX and hedging headwinds that reduced reported growth (~EUR 360m / -4.5pp), a disappointing perfume/travel retail performance, stabilization but no clear rebound in Greater China demand, geopolitical-related softness in the Middle East, and a higher exceptional tax burden. On balance, operational strength (desirability of product, margin, cash generation, and disciplined investment) outweighs the downside impacts highlighted by management.Positive Updates
Solid Revenue Growth and Q2 Acceleration
Revenue of EUR 8.2 billion in H1 2026, up 6% at constant exchange rates and up 2% at current exchange rates. Q2 sales of EUR 4.1 billion, +7% (acceleration versus Q1).
Negative Updates
Material Currency Headwinds
Negative exchange-rate effect of approximately EUR 360 million in H1 reduced reported growth by ~4.5 percentage points. Currency hedging costs were noted at close to EUR 100 million in H1 (management flagged larger hedging impact for the year), and conversion/translation dynamics were an important swing factor.
Read all updates
Q2-2026 Updates
Positive
Negative
Solid Revenue Growth and Q2 Acceleration
Revenue of EUR 8.2 billion in H1 2026, up 6% at constant exchange rates and up 2% at current exchange rates. Q2 sales of EUR 4.1 billion, +7% (acceleration versus Q1).
Read all positive updates
Company Guidance
Hermès kept its outlook unchanged and reiterated a medium‑term objective of ambitious revenue growth at constant exchange rates while flagging stepped‑up investment and capacity expansion: H1 revenue was €8.2bn (+6% at CER; Q2 €4.1bn, +7% CER), operating margin remained very high at 41%, gross margin rose to 71.1% (+0.4pp), adjusted available cash flow was €2.2bn (up 18%) and cash flow €2.7bn (up 16%); management expects H1 operating investments of €344m (≈€75m for production) to accelerate, with full‑year operating investments guided to ~€1.0bn. They noted a negative FX impact of ~€360m (‑4.5pp to growth) and hedging costs close to €100m (≈‑1.2pp), reported restated net cash of €12.9bn (equity €19bn; cash ≈50% of equity), paid €1.9bn of dividends and repurchased 95,000 shares, and confirmed plans to open new stores (e.g., Chicago, Brooklyn, Chengdu, Geneva, Brazil), add roughly one leather workshop per year through 2030 and continue hiring (600 hires in H1, >300 in France) while maintaining a focus on quality.Hermes International Financial Statement Overview
Summary
Income Statement
93
Very Positive
Balance Sheet
84
Very Positive
Cash Flow
88
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 16.13B | 16.00B | 15.17B | 13.43B | 11.60B | 8.98B |
| Gross Profit | 11.12B | 11.38B | 10.66B | 9.71B | 7.66B | 5.89B |
| EBITDA | 8.30B | 7.50B | 6.99B | 6.67B | 5.29B | 4.03B |
| Net Income | 4.51B | 4.52B | 4.60B | 4.31B | 3.37B | 2.44B |
Balance Sheet | ||||||
| Total Assets | 24.80B | 24.32B | 23.08B | 20.45B | 17.46B | 13.85B |
| Cash, Cash Equivalents and Short-Term Investments | 12.31B | 12.50B | 11.64B | 10.63B | 9.22B | 6.70B |
| Total Debt | 2.28B | 2.35B | 2.17B | 2.06B | 1.93B | 1.80B |
| Total Liabilities | 5.77B | 5.47B | 5.75B | 5.24B | 5.00B | 4.43B |
| Stockholders Equity | 19.02B | 18.84B | 17.33B | 15.20B | 12.44B | 9.40B |
Cash Flow | ||||||
| Free Cash Flow | 4.74B | 4.42B | 4.23B | 3.70B | 3.84B | 3.05B |
| Operating Cash Flow | 5.81B | 5.45B | 5.17B | 4.44B | 4.25B | 3.45B |
| Investing Cash Flow | -1.43B | -1.35B | -1.23B | -1.11B | -646.00M | -716.00M |
| Financing Cash Flow | -2.46B | -3.14B | -3.05B | -1.79B | -1.24B | -869.00M |
Hermes International Technical Analysis
Negative
1643.00
Price Trends
1636.81
Negative
1637.56
Negative
1843.52
Negative
Market Momentum
-11.36
Negative
44.72
Neutral
46.49
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 1643 is above the 20-day moving average (MA) of 1610.88, above the 50-day MA of 1636.81, and below the 200-day MA of 1843.52, indicating a bearish trend. The MACD of -11.36 indicates Negative momentum. The RSI at 44.72 is Neutral, neither overbought nor oversold. The STOCH value of 46.49 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | €165.28B | 36.57 | 25.52% | 1.15% | 2.75% | 0.80% | |
70 Outperform | €226.49B | 20.88 | 16.39% | 2.82% | -3.83% | -0.26% | |
64 Neutral | €75.66B | 16.57 | 18.84% | 3.25% | -3.83% | -0.09% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | €523.72M | 23.81 | 1.42% | ― | -1.16% | 47.64% | |
54 Neutral | €33.17B | -155.23 | 0.49% | 2.14% | -9.23% | -129.21% |
* Consumer Cyclical Sector Average
FR:RMS
Hermes International
1,576.00
-468.40
-22.91%
FR:CDI
Christian Dior
418.00
-24.59
-5.56%
FR:KER
Kering SA
268.55
60.08
28.82%
FR:MC
LVMH Moet Hennessy Louis Vuitton
458.40
-6.05
-1.30%
FR:SMCP
SMCP S.A.S.
6.65
0.10
1.53%
FR:DPT
ST Dupont SA
0.09
>-0.01
-7.29%
Hermes International Corporate Events
Hermès Delivers Strong First-Half 2026 Results and Expands Artisanal Capacity
Jul 29, 2026
Hermès reported first-half 2026 revenue of €8.2 billion, up 6% at constant exchange rates, with broad-based growth across regions except a slightly weaker Middle East. Recurring operating income reached €3.4 billion and operating ...
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.