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Hermes International (FR:RMS)
:RMS
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Hermes International
(RMS)
Select Model
Select Model
Rating:79Outperform
Price Target:
€2,461.00
▲(17.47% Upside)
Hermes International's strong financial performance and positive earnings call insights are the primary drivers of its stock score. While technical indicators are neutral, the high valuation poses a risk. The company's robust growth and strategic investments support a positive outlook, despite some regional and segment-specific challenges.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion.
Cash Flow Generation
Strong cash flow generation enhances liquidity, enabling strategic investments and providing a buffer against economic uncertainties.
Investment in Production Capacity
Investing in production capacity ensures the company can meet future demand, supporting growth and maintaining competitive advantage.
Negative Factors
Perfume and Beauty Segment Decline
A decline in this segment suggests challenges in product appeal or market competition, potentially affecting overall revenue diversification.
Challenges in the Chinese Market
Slow growth in China, a key market, could limit expansion opportunities and affect revenue growth if economic uncertainties persist.
Currency Depreciation Effects
Currency depreciation can erode profit margins and affect financial results, posing a risk to international operations and earnings stability.
Hermes International (RMS) vs. iShares MSCI France ETF (EWQ)
Market Cap
€219.23B
Dividend Yield1.24%
Average Volume (3M)53.30K
Price to Earnings (P/E)49.0
Beta (1Y)1.40
Revenue Growth10.31%
EPS Growth0.54%
CountryFR
Employees24,203
SectorConsumer Cyclical
Sector Strength84
IndustryLuxury Goods
Share Statistics
EPS (TTM)21.39
Shares Outstanding105,569,410
10 Day Avg. Volume57,681
30 Day Avg. Volume53,302
Financial Highlights & Ratios
PEG Ratio7.98
Price to Book (P/B)14.04
Price to Sales (P/S)16.04
P/FCF Ratio47.34
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€2,393.28Price Target Upside14.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)42.48
Revenue Forecast (FY)€16.01B
Hermes International Business Overview & Revenue Model
Company DescriptionHermès 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 MoneyHermes 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 Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 12, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mix of strong regional growth and solid performance in key segments like Leather Goods, but faced challenges such as a decline in the Perfume and Beauty segment and headwinds in China. Financial robustness and strategic investments indicate a positive outlook despite certain economic and geopolitical challenges.Q2-2025 Updates
Positive Updates
Solid Growth in Sales and Operating Income
Hermès recorded a solid growth in sales, reaching EUR 8 billion, up by 8% at constant rates, and the current operating income increased by 6%.
Strong Regional Performance
Europe (excluding France) saw a 13% increase, Japan grew by 16%, and America posted a 12% growth, showing robust performance across key regions.
Leather Goods and Saddles Segment Success
The Leather and Saddles division made remarkable progress with a 12% increase, thanks to increased production capacity.
Investment in Production Capacity
Hermès continues to invest in production with four new leather workshops planned over the next four years, including the Maroquinerie de L'Isle d'Espanac opening in September.
Positive Cash Flow and Financial Robustness
Adjusted available cash flow stands at EUR 1.8 billion, and the group remains financially robust with a restated net cash flow of EUR 10.7 billion.
Negative Updates
Perfume and Beauty Segment Decline
The Perfume and Beauty division experienced a 4% decline, negatively impacted by a strong Q2 comparison with previous product launches.
Challenges in the Chinese Market
Growth in Asia was only 3% in Q2 due to a challenging backdrop, with Chinese clients showing a wait-and-see attitude amid economic uncertainties.
Impact of One-off Tax on Large French Companies
Net profit was impacted by a one-off tax on large French companies, resulting in a EUR 260 million expense for the first half of the year.
Currency Depreciation Effects
A negative currency impact close to EUR 80 million was noted due to the depreciation of the CNY, USD, and Korean won.
Company Guidance
In the first half of 2025, Hermès reported a robust performance with sales reaching EUR 8 billion, marking an 8% increase at constant exchange rates. The current operating income rose by 6%, while all regions demonstrated growth, notably Japan with a 16% increase and America with a 12% rise. The leather goods division saw a 12% growth, aligning with its annual trajectory due to expanded production capacity. However, the Perfume and Beauty division experienced a 4% decline. The group's operating income was EUR 3.3 billion, and the net profit stood at EUR 2.5 billion, both up by 6%. Hermès invested EUR 316 million in the first half, with projections to exceed EUR 1 billion for the year. The financial outlook remains confident despite geopolitical and economic complexities, with plans to enhance investments across divisions and geographies in the second half.Hermes International Financial Statement Overview
Summary
Hermes International exhibits strong financial performance with robust revenue growth, high profit margins, a strong balance sheet with low leverage, and excellent cash flow generation. These factors indicate financial stability and capacity for sustained growth.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.85
Very Positive
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.90
Very Positive
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.88
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.70B | 15.17B | 13.43B | 11.60B | 8.98B | 6.39B |
| Gross Profit | 10.69B | 10.66B | 9.71B | 7.66B | 5.89B | 3.91B |
| EBITDA | 7.57B | 6.99B | 6.67B | 5.29B | 4.03B | 2.53B |
| Net Income | 4.48B | 4.60B | 4.31B | 3.37B | 2.44B | 1.39B |
Balance Sheet | ||||||
| Total Assets | 21.83B | 23.08B | 20.45B | 17.46B | 13.85B | 11.05B |
| Cash, Cash Equivalents and Short-Term Investments | 10.32B | 11.64B | 10.63B | 9.22B | 6.70B | 4.73B |
| Total Debt | 2.06B | 2.17B | 2.06B | 1.93B | 1.80B | 1.69B |
| Total Liabilities | 5.21B | 5.75B | 5.24B | 5.00B | 4.43B | 3.66B |
| Stockholders Equity | 16.60B | 17.33B | 15.20B | 12.44B | 9.40B | 7.38B |
Cash Flow | ||||||
| Free Cash Flow | 5.28B | 5.14B | 3.58B | 3.73B | 2.92B | 1.22B |
| Operating Cash Flow | 5.28B | 5.14B | 4.33B | 4.25B | 3.45B | 1.66B |
| Investing Cash Flow | -1.00B | -1.20B | -995.00M | -646.00M | -716.00M | -453.60M |
| Financing Cash Flow | -3.18B | -3.05B | -1.79B | -1.24B | -869.00M | -810.20M |
Hermes International Technical Analysis
Negative
2095.00
Price Trends
2137.94
Negative
2114.38
Negative
2238.46
Negative
Market Momentum
-6.75
Positive
45.21
Neutral
12.14
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 2095 is below the 20-day moving average (MA) of 2123.50, below the 50-day MA of 2137.94, and below the 200-day MA of 2238.46, indicating a bearish trend. The MACD of -6.75 indicates Positive momentum. The RSI at 45.21 is Neutral, neither overbought nor oversold. The STOCH value of 12.14 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | €219.23B | 49.01 | 27.36% | 1.24% | 10.31% | 0.54% | |
78 Outperform | €314.21B | 28.72 | 16.88% | 2.06% | -3.24% | -21.24% | |
76 Outperform | €104.91B | 23.03 | 19.54% | 2.33% | -3.24% | -21.65% | |
68 Neutral | €124.81B | 51.77 | 6.19% | 1.46% | 5.45% | 2.86% | |
62 Neutral | €37.22B | 51.06 | 4.91% | 2.03% | -14.56% | -64.91% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
FR:RMS
Hermes International
2,095.00
-186.03
-8.16%
FR:CDI
Christian Dior
581.50
0.04
<0.01%
FR:EL
EssilorLuxottica SA
270.10
41.46
18.13%
FR:KER
Kering SA
303.60
73.68
32.04%
FR:MC
LVMH Moet Hennessy Louis Vuitton
632.10
17.54
2.85%
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.