Hermes: Stifel maintains hold rating

(CercleFinance.com) - Regarding H1 2022 results the analysis notes a significant outperformance in Asia and a significant improvement in the company's margin.

The broker notes that Hermès reported better-than-expected organic sales growth in Q2 (+19.5% vs. +13%), which should not come as a big surprise after recent better-than-expected results from peers like LVMH.

Stifel mentions Hermès' resilient performance in Asia Pacific (+9.6% vs. consensus of +5%, with Greater China recovering strongly in June) and North and South America (+26% vs. +18%) in Q2.

The main surprise today was the extent of the increase in Hermès' margin (42.1%, compared to 37.8% for the consensus, +140 bp compared to the previous year), which translates into an operating profit of 2.3 billion euros, 14% above the consensus, the analyst adds.

While the group's gross margin fell by 30 bp y-o-y to 71.2%, this was more than offset by the 170 bp decline in its operating costs to sales ratio.

Hermès has reported H1 operating income that is up 34% y-o-y. Hermès' net cash position increased to 7.7 billion euros at end-June.

Stifel maintains its Hold rating on the stock with a target price of 1.100 euros. It is currently up about 6.5% in Paris at noon.


Copyright (c) 2022 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.