Hermès International Experiences a 3.01% Decline Amid Sector Weakness
Hermès shares fell by 3.01% to €2,124 this Monday, January 19, in a context of sectoral weakness, just days after opening a new store in Hanoi on January 16. The upcoming annual results publication on February 12, 2025, will be crucial for the stock's trajectory.
Market Pressure Following New Store Opening
The luxury leather goods maker opened this week under pressure, dropping 3.01% to settle at €2,124 mid-session. This decline is part of a broader negative trend, with a weekly performance down by 4.2% and a yearly drop of 14.35%. The stock is now trading below its 50-day moving average, positioned at €2,131.46, which serves as a short-term resistance level. More concerning, the gap with the 200-day moving average, at €2,222.89, has widened, illustrating the difficulty of the stock to regain its long-term upward momentum. This movement occurs just days after the inauguration of the new Hermès store in Hanoi on Tràng Tiên Street on January 16, enhancing the group's presence in Vietnam since 2008. This Asian expansion reflects the geographic growth strategy of the saddler, even though concerns about a slowdown in Chinese demand weigh on the entire sector. However, the RSI at 65 points remains in a neutral zone, far from the overbought threshold of 70, suggesting that the stock still has technical leeway before reaching levels of excessive tension.
Market Caution Reflected in Target Price Revisions
Recent revisions of target prices reflect market caution. Oddo BHF lowered its target from €2,264 to €2,200 on January 10 with a neutral recommendation, reflecting uncertainties about the group's ability to maintain its growth pace. HSBC maintains a target of €2,250 with a hold recommendation, while Deutsche Bank is more optimistic with a target of €2,400 and a buy recommendation, representing a theoretical upside potential of 13% from the current price. The MACD shows a positive signal with a line at 24.69 above its signal line at 13.45, indicating that the underlying trend remains bullish despite occasional corrections. The major support at €2,082, just 2% below the current price, is a crucial level to watch in the upcoming sessions. The publication of the 2025 annual results scheduled for February 12 will be a key event to assess the group's margin strength and its ability to navigate a deteriorated sector environment.
