(News Bulletin 247) – The research office switched to purchasing the leather goods and saddle maker this Monday, January 6, considering that the company will still show significantly higher growth than its rivals. This will allow it to better protect its margins.

Once again, Hermès stood out on the stock market last year. The saddler-leather goods maker gained 21% in 2024, a solid performance in contrast to the decline of LVMH (13.4%) and the fall of Kering (-40.3%).

Will the group still stand out among its luxury peers in 2025? Stifel thinks, in any case, so. The research office switched to buying on the value, against “hold” previously, while increasing its price target to 2,560 euros against 2,150 euros previously.

On the Paris Stock Exchange, Hermès shares advanced 3.2% around 3:30 p.m. The title is also carried by press information reporting that the customs duties wanted by the elected American president, Donald Trump, could be less violent than anticipated.

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Pricing power and wealthy clients

Stifel estimates that Hermès will still show a significant growth gap with other luxury groups this year. The research office anticipates an increase in revenue of 4% for the entire sector in 2025, compared to 11.5% for those of Hermès.

This gap will be fueled by a still intact “pricing power”, “great visibility for leather goods products and a loyal and wealthy clientele”, writes the financial intermediary.

“These characteristics should allow Hermès to protect its margins in 2025 better than most of the companies we cover, despite unfavorable currency hedging dynamics in the first half of 2025,” underlines Stifel.

“The long-term story remains intact: Hermès has proven its ability to outperform in good and bad years by offering attractive and relatively less cyclical sales growth prospects,” continues the research firm.

Stifel notes that the stock currently trades at a lower premium than its historical average of 57% compared to other luxury groups. However, according to the design office, Hermès currently deserves to benefit from a premium at its all-time high due to both its very high operating margin (around 40% compared to an average of 32% over the period 2004-2024). ) and its very high sales per square meter (more than 90,000 square meters).

HSBC, for its part, had already raised its purchase opinion on Hermès at the beginning of December. The bank explained that the company outperforms its competitors in difficult times, thanks to its waiting lists for its products and its “economically stable” clientele, but also in more favorable times, thanks to its products not linked to leather goods.

Hermès will publish its annual results on February 14. Stifel expects the company to report 11% like-for-like growth in the fourth quarter and an operating margin of 40.1% for all of 2024.