Move over LVMH: Hermes stock price is killing it

The LVMH stock price has been in a strong bullish trend in the past decade, helping it become the 11th biggest company in the world. It is the biggest company in Europe. The stock has jumped by more than 50% in the past 12 months. 

However, beneath the surface, Hermes has been a better performer than LVMH and other luxury goods companies like Kering and Richemont. It has jumped by over 80% in the past 12 months. Hermes is the 40th biggest company in the world with a market cap of over $221 billion. The chart below shows that Hermes shares have outperformed LVMH in the past 5 years.

Hermes growth continues

Hermes and LVMH are two of the biggest luxury goods companies in the world. The main difference is that LVMH is more broad, with over 70 companies. LVMH operates in industries like luxury shipbuilding, watches, clothes, and wines and spirits among others.

Hermes, on the other hand, has fewer brands in its ecosystem. The most recent results showed that most of its business is doing well. Its ready-to-wear and accessories revenue jumped by 34% in the first quarter. It was followed by the silk and textiles revenue jumped by 20% while watches revenue rose by 25%. 

Further, the perfume and beauty revenue jumped by 7% while other Hermes Business Lines rose by 28%. By geography, Japan was the best region as its revenue jumped by 26%. It was followed by 23% in Asia and France and Americas where revenue dropped by 19% and 21%. 

Analysts expect that the company will do well this year, helped by China, the biggest buyer of luxury goods. Still, there are concerns about whether the current Hermes valuation supports its growth. Data compiled by Investing shows that Hermes has a PE multiple of 61 compared to LVMH’s 31.

Hermes share price forecast

Hermes chart by TradingView

The daily chart shows that the Hermes stock price has been in a strong bullish trend and is currently sitting at the key resistance point at €2,000. The shares sits above the key resistance point at €1,766, the highest point on February 3rd.

They remain above the 50-day and 100-day moving averages. There are also signs that the bullish trend is fading at the resistance level at €2,000. Therefore, the stock will retreat in the coming days as buyers target the key support at €1,900. Still, the bullish trend will continue as long as the price is above the 50-day moving average.

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