(BFM Stock Exchange) – The Sellier -Maroquerier has progressed in recent months and has come closer to LVMH in terms of market capitalization. Can he, however, delight his title of first capitalization of the Parisian place?

On all stock markets, Hermès shines with a thousand lights. As we have written in a previous article, the Sellier-Maroquinier signs the second best performance in the CAC 40 over three years, as well as the strongest over five years and 10 years. Even in the shorter term, the title has been 17.9% since January 1, in 2025, which is for the time being the ninth higher increase in CAC 40.

Hermès still distinguished himself on the occasion of the publication of his annual results on February 14. The group then announced growth of 17.6% in the fourth quarter, when analysts only expected 11% increase. French society had, once again, signed the strongest growth in luxury over the period, and by far.

“The unique corporate model of Hermès distinguishes it from its peers, in particular thanks to the resistance of volumes and a progressive price policy,” said Bank of America, in a note written last week.

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An even significant gap

On February 14, still, the market capitalization (the value of all the shares) of Hermès crossed the bar of 300 billion euros. The group then approached LVMH, the first capitalization of the Paris Stock Exchange, and the second in Europe. About 50 billion euros then separated the two companies. The gap has been dug a little since, currently being around 58 billion euros.

In view of his best dynamic, can Hermès catch up with his “delay” on LVMH and chew at number 1 in luxury his place of first French capitalization?

The bar is still placed very high. Currently, so that Hermès passes in front, it would be necessary, for example, that his action increased by 20.5% over a given period, and that that of LVMH is stable over the same period. Or that Hermès takes 32.5% and that LVMH only wins 10% over the same period. In other words, the outperformance of Hermès compared to LVMH must be around 20-25 percentage points.

Such outperformance is very demanding. Last year, Hermès benefited at full speed from its status as a refuge value when the demand for luxury products has slowed heavily. This has allowed it to display, in 2024, a stock market performance of 34 percentage points (+21% against -13.4%) compared to LVMH, whose activities, including wines and spirits, are more cyclical.

Supposing that Hermès still manages to widen this gap very strongly is likely to ignore the assets and the rebound capacity of LVMH.

Positive analysts on the two titles

The average course objective of analysts on Investing.com gives a potential of almost 8% to LVMH, while, for Hermès, this average course objective is slightly under the current level of the action (-3.5%).

Several analysts are, in reality, positive on the two actions. This is the case of Bank of America, with the purchase on the two titles, and which has a price target of 3,000 euros on Hermès and 800 euros on LVMH, granting respective potentials, 10% and 15.1%. Ditto for HSBC which advises to buy the two actions.

When questioned, Luca Solca, analyst at Bernstein, thinks that it is more likely that LVMH remains before Middle Long Term.

“LVMH is today confronted with a certain number of problems: the revival of Dior, the lull of global demand for spirits, the significant losses of DFS (the Société de ‘Travel Retail’ by LVMH, editor’s note), and the tough competition from Richemont in the field of jewelry,” he explains.

“I doubt that all these problems continue in the years to come. Therefore, I think it is more likely that the valuation of LVMH increases again than to see Hermès join its market capitalization (that of LVMH therefore, editor’s note) in the next three to five years,” says the analyst.

Luca Solca specifies that this does not mean that Hermès has no good qualities, on the contrary. The Sellier-Maroquinier is “a very exceptional company that we love and recommend,” he says. “But which is already negotiating the profits at 60 times,” recalls the analyst.

A comparison may not be so relevant

Another financial intermediary believes that seeing Hermès pass in front of LVMH in terms of market capitalization in the medium term “does not constitute an impossible scenario”. “The two actions actually meet different needs. If there are fears about luxury, investors will tend to opt for Hermès, while if a recovery is looming, it will be more LVMH which is more cyclic,” he explains. “Hermès is a bit of a quiet strength while LVMH always needs to reinvent itself”, also judges this financial intermediary.

“In my opinion, the valuation of LVMH currently offers an interesting increase in increase, more interesting than in Hermès,” said Jie Zhang, analyst at the independent alphavalue design office.

“Now, it has been said that the Hermès action has been too expensive for fifteen years. And the title has been progressing for fifteen years,” she continues. “Hermès has become a refuge value, because the group manages to display two -digit growth in all circumstances, as its products are sought, desired. The consequence is that it has become extremely difficult to promote Hermès. To the point that certain analysts exclude Hermès when they calculate sectoral averages”, develops the analyst. “So difficult to answer the question,” she concludes.

Ultimately, comparing Hermès and LVMH is perhaps difficult or not so relevant as the two values ​​are different. Hermès remains a “little” actor of luxury, centered on silk, clothes, leather goods. LVMH is much larger and diverse. If the fashion-manufacturery remains its flagship division, perfumes and jewelry-horlogeries are much more important than at Hermès, and the company of Bernard Arnault is present in activities where Hermès is absent (spirits, wines, specialized distribution).

“Compare LVMH and Hermès is not as obvious as it seems. Admittedly, the two companies are evolving in the luxury sector, but their profiles are very different,” explains Jie Zhang.

“The attractiveness of Hermès is mainly based on a unique brand, characterized by an offer voluntarily lower than the demand and endless waiting lists, thus strengthening its exclusivity. In addition, the significant difference in size between the two groups makes their comparison complex: Hermès generates an annual turnover of around 15 billion euros, while LVMH reaches nearly 85 billion Distributed over five distinct segments.