Hermès: beware of premium, Aurel BGC warns.
(CercleFinance.com) - Aurel BGC has confirmed its sell rating on French luxury goods group Hermès International, with the group's publication of its interim results.
Its analysts in Paris warn against the share's premium relative to its sector. The broker also maintains its target price at 360 euros, which suggests downside potential of 15%.
Already known since July, the group's interim sales, which amongst other things, include upholstery, increased by 10% at constant exchange rates. Management confirmed its unquantified forecast of an "increase in sales at ambitious constant exchange rates" - meanwhile, Aurel BGC believes that overall the group's interim trend should be maintained throughout the full-year.
Hermes' operating profit rose by 13% to 931 million euros in H1, bringing its margin to 34.3%, representing an historical peak. However, this is particularly due to the "non-recurrent positive impact of currency hedges over the first months of the year," management said, and therefore it cannot be extrapolated. Aurel BGC still expects the group's margin to remain stable at 32.6% in 2017.
Copyright (c) 2017 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.
Its analysts in Paris warn against the share's premium relative to its sector. The broker also maintains its target price at 360 euros, which suggests downside potential of 15%.
Already known since July, the group's interim sales, which amongst other things, include upholstery, increased by 10% at constant exchange rates. Management confirmed its unquantified forecast of an "increase in sales at ambitious constant exchange rates" - meanwhile, Aurel BGC believes that overall the group's interim trend should be maintained throughout the full-year.
Hermes' operating profit rose by 13% to 931 million euros in H1, bringing its margin to 34.3%, representing an historical peak. However, this is particularly due to the "non-recurrent positive impact of currency hedges over the first months of the year," management said, and therefore it cannot be extrapolated. Aurel BGC still expects the group's margin to remain stable at 32.6% in 2017.
Copyright (c) 2017 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.