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Herm\u00e8s<\/strong> may be the best student in the luxury sector right now. The French luxury giant surpassed 200 billion euros<\/strong> in market value for the first time this week on the CAC 40. Its stock rose to nearly \u20ac1.919, up from less than \u20ac958 at the end of June 2022<\/strong>, a twofold increase in its share price over the period!<\/p>\n <\/p>\n In the luxury sector, it is outpaced by the world leader LVMH<\/strong>, which reigns supreme with a value of 420 billion euros<\/strong>. This week, the fortune of its majority shareholder, Bernard Arnault<\/strong> (now the world’s largest fortune according to the Forbes ranking), exceeded 200 billion euros.<\/strong><\/p>\n <\/p>\n By 2023, Herm\u00e8s International had grown by about 30%<\/strong> and is now worth more than the combined value of a series of French companies in several sectors, including Airbus, Renault, Vivendi and Orange.<\/strong><\/p>\n <\/p>\n The recovery of the Chinese economy<\/strong> is a key factor in this valuation, as the luxury sector has benefited from strong demand in that market since January. The group also benefits from significant pricing power<\/strong>, the ability of a company to set its prices, allowing it to increase sales prices in recent months. At the end of 2022, Herm\u00e8s had announced strong price increases, in the order of 8 to 10%<\/strong>, compared to 2 to 4%<\/strong> in previous years, emphasized the management company Amplegest<\/strong> last January, interviewed by Capital.<\/p>\n <\/p>\n <\/p>\n While investors remain concerned about the current economic situation, Herm\u00e8s seems to be perfectly resilient to the inflationary environment. And the group should weather the risk of recession<\/strong> that analysts are predicting relatively well.<\/p>\n <\/p>\n “While Herm\u00e8s is unlikely to be immune to the risk of a slowdown in global trends due to an increasingly complex macroeconomic environment, we expect its unique supply-driven business model to drive this continued outperformance”<\/em>, UBS Group<\/strong> analysts noted in an April 4 note.<\/p>\n <\/p>\n Meanwhile, analysts are busy raising their price targets for Herm\u00e8s ahead of its first-quarter earnings release on April 14.<\/strong><\/p>\n <\/p>\n <\/p>\n Despite its impressive valuation and strong share price, Herm\u00e8s may still seem expensive on the stock market. Moreover, according to the financial group Oddo, the pace of growth in the luxury goods sector is likely to slow down in the second half of the year.<\/strong><\/p>\n <\/p>\n It is also worth noting that when Herm\u00e8s peaked on Wednesday, the stock was “overbought” (which means that its upside potential was exhausted and that the probability of a reversal is high).<\/p>\n <\/p>\n Herm\u00e8s was not the only one to benefit from the boom in luxury stocks, as Burberry and Hugo Boss also benefited<\/strong>. This year, the rise in luxury stocks has made Paris the leading stock market in Europe, overtaking London.<\/p>\n <\/p>\nPrepared for the risks<\/h2>\n
Towards a slowdown?<\/h2>\n