Key Takeaways
- Hermès’s third-quarter sales rose 4.3% at constant exchange rates to €4.1 billion, below the 5.2% analysts expected, and the stock fell 8% in early trading on Oct. 22.
- Analysts expect normalized EPS to rise 2.1% to €43.97 in 2026, then 9.4% to €48.11 in 2027.
- At about 30x this year’s estimate and 27x next year’s, the premium looks earned, as long as growth picks back up in 2027.
- The 41% operating margin held through a currency hit of more than €360 million in the first half, and the full-year report in February is the next test.
Hermès International (RMS) sold €4.1 billion of goods in the third quarter, up 4.3% at constant exchange rates. That was below the 5.2% growth analysts polled by Visible Alpha expected, and the stock fell 8% in early trading in Paris on Oct. 22, Reuters reported.
That drop came on top of a rough year: Hermès stock is down 38% in 2026. If you’ve spent years waiting for a better price on the Birkin maker, you’re probably wondering whether this is it.
What Hermès Reported
The third-quarter report was better than the stock’s reaction suggests:
- Sales of €4.1 billion, up 4.3% at constant exchange rates
- €12.3 billion for the first nine months, up 6% at constant rates but 3% as reported, after currencies cut about €310 million from sales
- The Americas up 8.8% at constant rates, to €791 million, while Asia-Pacific outside Japan was flat and the Middle East was the only region that shrank
- Leather goods, its biggest business, up 10.8% at constant rates, a little faster than the 9.8% it grew in the first half
Finance chief Eric du Halgouet called China “very difficult,” but Hermès stood by its medium-term goal for revenue growth at constant exchange rates, which it calls ambitious.
So the miss was small, and the biggest business is growing faster.
Investors Are Paying Less for the Same Earnings
Hermès’s normalized EPS slipped 1.8% in 2025, to €43.07 from €43.87. The stock has fallen 38% this year, so investors are now paying much less for roughly the same earnings. At the Nov. 3 close of €1,313, it trades at 30.5x last year’s normalized earnings.
The real question is whether the earnings ahead justify even that. Analysts expect normalized EPS to rise 2.1% to €43.97 in 2026, then 9.4% to €48.11 in 2027:
Revenue estimates rise the same way: up 4.2% to €16.68 billion this year, then up 7.5% to €17.93 billion.
So 2026 is another slow year for earnings, and a multiple of 29.8x this year’s estimate is a bet that growth picks back up in 2027.
TIKR Tracks 23 Analysts on Hermès. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Hermès, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Hermès’s Analyst Ratings
Hermès’s Margins Held Up
The premium depends on Hermès’s margins. In the first half of 2026, recurring operating income was 41.0% of sales, against 41.4% a year earlier, even though currencies cut more than €360 million from revenue. Gross margin rose to 71.1% from 70.7%, which management tied to tight inventory and strong sell-through.
Demand for what Hermès makes is still there. It’s just growing more slowly.
The risk is Asia-Pacific outside Japan, which was flat at constant rates in the third quarter. Bloomberg puts the region that includes China at about 42% of Hermès’s revenue. If it stays flat, the 2027 estimates may have to come down.
What February Has to Show for Hermès
Hermès reports full-year results in mid-February. That report will give the year’s margin and the first real read on whether 9.4% EPS growth in 2027 is realistic.
At 29.8x this year’s earnings and 27.3x next year’s, the premium looks earned to me. You get a 41% operating margin and leather goods growing by double digits, and analysts expect earnings to rise 9% next year. Wall Street’s average price target of €1,558 is 19% above the Nov. 3 close.
Of course, if February’s numbers point to another slow year, that multiple won’t look so cheap.
So what is Hermès stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Hermès could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
