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Hermes International (FR:RMS)
:RMS
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Hermes International
(RMS)
Select Model
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Rating:79Outperform
Price Target:
€2,461.00
▲(14.15% 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
$225.61B
Dividend Yield1.21%
Average Volume (3M)56.03K
Price to Earnings (P/E)50.4
Beta (1Y)1.44
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. Volume48,274
30 Day Avg. Volume56,029
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 Cap1.03
Enterprise Value/Revenue14.85
Enterprise Value/Gross Profit21.82
Enterprise Value/Ebitda30.81
Forecast
1Y Price Target
$2,386.54Price Target Upside10.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)42.47
Revenue Forecast (FY)$16.02B
Hermes International Business Overview & Revenue Model
Company DescriptionHermes International (RMS) is a global leader in the luxury goods sector, specializing in the production and distribution of high-end fashion accessories, leather goods, ready-to-wear apparel, and fragrances. The company is renowned for its commitment to craftsmanship, quality, and exclusivity, operating through various segments that include leather, textiles, perfumes, and lifestyle products. Hermes International caters to an affluent clientele, positioning itself as a symbol of luxury and elegance in the fashion industry.
How the Company Makes MoneyHermes International generates revenue primarily through the sale of its luxury products, which include iconic items such as handbags, scarves, and watches. The company's revenue model is centered around direct retail sales through its own boutiques, online platforms, and select high-end department stores. Key revenue streams include the sale of leather goods, apparel, home goods, and fragrances. Additionally, Hermes benefits from a strong brand reputation that allows it to maintain premium pricing. The company has established significant partnerships with luxury retailers and engages in exclusive collaborations that enhance its market presence and drive sales. Seasonal collections and limited-edition releases also contribute significantly to its earnings, as they create demand and urgency among consumers seeking unique luxury items.
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
Positive
2156.00
Price Trends
2127.06
Positive
2170.82
Negative
2313.62
Negative
Market Momentum
2.03
Negative
52.28
Neutral
71.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:RMS, the sentiment is Positive. The current price of 2156 is below the 20-day moving average (MA) of 2157.00, above the 50-day MA of 2127.06, and below the 200-day MA of 2313.62, indicating a neutral trend. The MACD of 2.03 indicates Negative momentum. The RSI at 52.28 is Neutral, neither overbought nor oversold. The STOCH value of 71.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 | $225.61B | 50.44 | 27.36% | 1.21% | 10.31% | 0.54% | |
78 Outperform | €303.82B | 27.77 | 16.88% | 2.08% | -3.24% | -21.24% | |
76 Outperform | €107.80B | 23.66 | 19.54% | 2.29% | -3.24% | -21.65% | |
68 Neutral | €146.16B | 60.64 | 6.19% | 1.24% | 5.45% | 2.86% | |
62 Neutral | €37.11B | 50.91 | 4.91% | 1.87% | -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
2,156.00
158.98
7.96%
FR:CDI
Christian Dior
586.00
48.31
8.99%
FR:EL
EssilorLuxottica SA
315.60
89.62
39.66%
FR:KER
Kering SA
320.60
107.16
50.21%
FR:MC
LVMH Moet Hennessy Louis Vuitton
637.00
62.61
10.90%
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.