Hermes International (RMS) AI Stock Analysis

• Market Cap: €198.56B
• Dividend Yield: 1.24%
• Average Volume (3M): 59.63K
• Price to Earnings (P/E): 49.2
• Beta (1Y): 1.35
• Revenue Growth: 10.31%
• EPS Growth: 0.54%
• Country: FR
• Employees: 24,203
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Luxury Goods
• EPS (TTM): 21.68
• Shares Outstanding: 105,569,410
• 10 Day Avg. Volume: 58,248
• 30 Day Avg. Volume: 59,635
• PEG Ratio: -27.69
• Price to Book (P/B): 11.80
• Price to Sales (P/S): 13.90
• P/FCF Ratio: 41.39
• 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: €2,424.28
• Price Target Upside: 27.76% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 46.4
• Revenue Forecast (FY): €17.19B

• Rating: 76 Outperform
• Price Target: €2,426.00 ▲(27.85% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by exceptional financial performance (strong growth, margins, and cash generation) and a constructive earnings outlook with continued capacity investment. This is tempered by expensive valuation and a mixed technical picture with only modest near-term momentum.

Positive Factors

High profitability & margins

Hermès exhibits best-in-class margins that reflect durable pricing power and a premium brand position. Sustained gross and operating margins support strong earnings conversion, enabling reinvestment and returns even if top-line growth moderates, underpinning long-term profitability.

Robust cash generation

Consistent and growing operating cash flow and strong cash conversion indicate durable free cash generation. This funds capacity expansion, funds dividends or buybacks, and provides a buffer through cycles, supporting strategic investments without overreliance on external financing.

Production capacity expansion & leather growth

Targeted capacity additions tied to leather goods — a high-margin core — point to structural revenue and margin support. Expanding artisanal production increases supply control, reduces bottlenecks, and scales a category central to brand value, reinforcing long-term market share in luxury leather.

Negative Factors

Net income dip in 2025

A revenue‑up but net‑income down outcome signals margin pressure from costs, FX, or one-offs. If persistent, this could indicate structural mix shifts or rising operating costs that erode the company's historically exceptional profitability and reduce sustainable earnings growth.

Notable increase in total debt

A material rise in absolute debt after years of ultra-low leverage weakens the previously conservative balance sheet profile. Higher debt raises interest and refinancing exposure and reduces capital flexibility for opportunistic moves or cushioning macro shocks over the medium term.

China weakness & Perfume & Beauty decline

Underperformance in China and a shrinking Perfume & Beauty segment show geographic and category vulnerability. Given China’s structural importance to luxury demand, prolonged softness or weaker product diversification can restrain medium-term revenue momentum and increase reliance on core leather goods.

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 its logistics and delivery services. The company's main revenue streams include parcel delivery fees from e-commerce retailers, contracts with businesses for B2B shipping solutions, and additional services such as warehousing and supply chain management. Significant partnerships with major retailers and online marketplaces enhance its market reach and volume of deliveries. Furthermore, the company benefits from economies of scale, allowing it to optimize operational costs and increase profitability. Seasonal spikes in e-commerce activity, especially during holidays, also contribute substantially to revenue growth.

Hermes International Financial Statement Overview

Summary

Excellent profitability and multi-year growth with best-in-class margins and strong cash conversion. Minor offsets are the slight net income dip in 2025 versus 2024 and the notable increase in total debt in 2025.

Income Statement

Hermes shows elite profitability and a strong growth trajectory. Revenue rose steadily from 2020 to 2025 (from ~€6.4B to ~€16.0B), and margins are exceptionally high for the sector (2024 gross margin ~70%, operating margin ~41%, net margin ~30%). A watch-item is that 2025 net income (€4.52B) dipped slightly versus 2024 (€4.60B) despite higher revenue, suggesting some cost pressure or mix/FX effects, but overall earnings power remains best-in-class.

Balance Sheet

The balance sheet is very strong, supported by a large equity base (equity grew from ~€7.4B in 2020 to ~€18.8B in 2025) and low leverage (2024 debt-to-equity ~0.13). Returns on equity are consistently high (~26–28% in 2021–2024), reflecting strong capital efficiency. The main flag is the notable step-up in total debt in 2025 (~€4.33B vs ~€2.17B in 2024); even if leverage likely remains manageable, it reduces the previously ultra-conservative profile.

Cash Flow

Cash generation is robust and generally high quality. Operating cash flow increased from ~€1.66B (2020) to ~€5.37B (2025), and cash conversion is strong (2024 operating cash flow ran at ~1.4x net income; free cash flow equaled net income). Free cash flow did soften in 2023 (down ~4% and below net income), but it rebounded strongly in 2024–2025, indicating resilient underlying demand and good working-capital discipline.

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	4.33B	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	5.37B	5.14B	3.58B	3.73B	2.92B
Operating Cash Flow	5.37B	5.14B	4.33B	4.25B	3.45B
Investing Cash Flow	-1.28B	-1.20B	-995.00M	-646.00M	-716.00M
Financing Cash Flow	-3.14B	-3.05B	-1.79B	-1.24B	-869.00M

Hermes International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1897.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 1897.5 is below the 20-day moving average (MA) of 2066.52, below the 50-day MA of 2096.38, and below the 200-day MA of 2163.26, indicating a bearish trend. The MACD of -29.19 indicates Positive momentum. The RSI at 29.01 is Positive, neither overbought nor oversold. The STOCH value of 9.83 is Positive, 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	76 Outperform	€198.56B	49.17	25.50%	1.24%	10.31%	0.54%
CDI	64 Neutral	€87.32B	23.71	19.54%	2.33%	-3.24%	-21.65%
MC	63 Neutral	€249.64B	29.51	16.88%	2.06%	-3.24%	-21.24%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
EL	61 Neutral	€99.07B	53.52	6.19%	1.46%	5.45%	2.86%
KER	48 Neutral	€31.17B	-23.01	4.91%	2.03%	-14.56%	-64.91%