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Analysts see 20% upside for Hermès’ stock price

Exane BNP Paribas has upgraded Hermès International from Neutral to Outperform, maintaining a price target of 2,340 euros ($2,503), citing a potential 20% upside as the stock trades 20% below its March 2024 peak of 2,410.5 euros ($2,580). The firm justifies Hermès’ higher valuation, now at 41 times forward P/E compared to its pre-Covid average of 35, due to increased cash flow and strong EBIT margins of 40%. Despite potential economic challenges, Hermès’ resilience and visibility in sales are highlighted, with the company reporting a 15% turnover increase in H1 2024 to 7.5 billion euros ($8 billion), led by leather goods. Kepler Cheuvreux has kept a Buy rating but lowered its price target to 2,300 euros ($2,462) due to expected margin pressures.

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