October 31, 2024
Top 10 Stock Hermes Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Hermes – Top 10 Stock in Cotation Assistée en Continu Index CAC 40
Hermes is listed as a top 10 stock on October 31, 2024 in the market index CAC 40 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 28 (28% performer), Obermatt assesses an overall hold recommendation for Hermes on October 31, 2024.
Snapshot: Obermatt Ranks
| Country | France |
| Industry | Apparel, Accessories, Luxury |
| Index | CAC 40, CAC All, SBF 120, Diversity Europe, Renewables Users |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Hermes Hold
| 360 METRICS | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 5 |
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| GROWTH | ||||||||
| GROWTH | 56 |
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| SAFETY | ||||||||
| SAFETY | 70 |
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| SENTIMENT | ||||||||
| SENTIMENT | 39 |
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| 360° VIEW | ||||||||
| 360° VIEW | 28 |
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ANALYSIS: With an Obermatt 360° View of 28 (better than 28% compared with alternatives), overall professional sentiment and financial characteristics for the stock Hermes are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Hermes. The consolidated Growth Rank has a good rank of 56, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 56% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 70 which means that the company has a financing structure that is safer than 70% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 5 which means that the share price of Hermes is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 95% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 39, which means that professional investors are more pessimistic about the stock than for 61% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 28, Hermes is worse than 72% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 56), and the company is safely financed (Safety Rank of 70). However, professional market sentiment is low(Sentiment Rank of 39). The negative market view on Hermes may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Hermes compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Hermes only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 39 (better than 39% compared with alternatives), overall professional sentiment and engagement for the stock Hermes is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for Hermes. Analyst Opinions are at a rank of 51 (better than 51% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 53 which means that currently, professional investors hold more stock in this company than in 53% of alternative investment opportunities. But Analyst Opinions Change has a rank of 15, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in Hermes. Furthermore, Market Pulse has a rank of 47, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 53% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 39 (less encouraging than 61% compared with investment alternatives), Hermes has a reputation among professional investors that is below that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: Hermes Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 5 (worse than 95% compared with alternatives), Hermes shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Hermes. Price-to-Sales is 3 which means that the stock price compared with what market professionals expect for future profits is higher than 97% of comparable companies, indicating a low value concerning Hermes's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 5, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Hermes. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 13 and Dividend Yield, which is lower than 80% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 5, is a sell recommendation based on Hermes's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Hermes? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Hermes? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Hermes may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Hermes Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 56 (better than 56% compared with alternatives), Hermes shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Hermes. Sales Growth has a rank of 87, which means that, currently, professionals expect the company to grow more than 87% of its competitors. Profit Growth with a rank of 51 is also above average. But Capital Growth has only a rank of 26, and Stock Returns with 49 are also below-average. Stock returns for Hermes have recently been below 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 56, is a buy recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Hermes. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. ...read more
Safety Strategy: Hermes Debt Financing Safety above-average
| SAFETY METRICS | October 31, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 81 |
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| REFINANCING | ||||||||
| REFINANCING | 22 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 90 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 70 |
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ANALYSIS: With an Obermatt Safety Rank of 70 (better than 70% compared with alternatives), the company Hermes has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Hermes is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Hermes. Leverage is at a rank of 81, meaning the company has a below-average debt-to-equity ratio. It has less debt than 81% of its competitors. Liquidity is also good at a rank of 90, meaning the company generates more profit to service its debt than 90% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 22, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 78% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 70 (better than 70% compared with alternatives), Hermes has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Hermes. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Hermes Below-Average Financial Performance
| COMBINED PERFORMANCE | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 5 |
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| GROWTH | ||||||||
| GROWTH | 56 |
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| SAFETY | ||||||||
| SAFETY | 90 |
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| COMBINED | ||||||||
| COMBINED | 43 |
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ANALYSIS: With an Obermatt Combined Rank of 43 (worse than 57% compared with investment alternatives), Hermes (Apparel, Accessories, Luxury, France) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Hermes are low in value (priced high) with a consolidated Value Rank of 5 (worse than 95% of alternatives). But they show above-average growth (Growth Rank of 56) and are safely financed (Safety Rank of 70, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 43, is a hold recommendation based on Hermes's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Hermes exhibits low value (Obermatt Value Rank of 5), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 56). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 70) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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