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Luxury companies might be an unconventional investment due to their slightly different operations, especially with Hermès International (EPA: RMS), a 200-year-old family-owned business. In the previous year, RMS stock showed some solid results as it grew and increased in revenue and sales to over €13 billion. So, what exactly makes this luxury stock a standout choice for luxury brands? The answer lies below. Strong, growing financials of Hermès In the fiscal year 2023, Hermès achieved revenues totaling €13.4 billion, marking a notable 16% year-over-year growth trajectory. As previously outlined, this growth was attributed to enhancements across all operational segments.  The enhancement observed in gross margin was particularly noteworthy, which increased to 72.3%. Furthermore, the operating margin exhibited a significant improvement, rising by 160 basis points to attain 42.1%. Hermès 2023 revenue branches and growth. Source: Hermès A significant aspect to consider regarding Hermès is its substantial presence in the Asia Pacific region, which accounts for nearly 50% of its total sales revenue. By comparison, LVMH (EPA: MC), another prominent luxury goods company, derives approximately 30% of its sales from this region. Regions of Hermès sales. Source: Hermès Analyst targets for Hermès stock Analysts at TradingView noted Hermès’ previous year of success, assigning a ‘buy’ rating to its stock. Among 21 opinions gathered, 7 recommended a ‘strong buy,’ 1 suggested ‘buy,’ 12 advised ‘hold,’ and only one proposed a ‘strong sell’ for Hermès shares. The designated price target is €2,179, indicating a slight downside of -2.39% from the current Hermès stock price. Hermès stock price target. Source: TradingView Louise Singlehurst of Goldman Sachs reaffirmed a ‘Hold’ rating for Hermès International, with a price target of €2,245.  Alongside Goldman Sachs, J.P. Morgan’s Chiara Battistini also assigned a ‘Hold’ rating to Hermès International in a report released on February 9. Carole Madjo at…

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Filed under: News - @ February 21, 2024 10:16 am