Hermès Shares Drop 30% in a Year, Sliding Towards Technical Support at €1,609

American Bank Citi Revises Hermès Target

Yesterday, American bank Citi revised its target for Hermès International, lowering it from €1,910 to €1,821, while maintaining a neutral recommendation. This revised target still suggests a revaluation potential of about 11% compared to the current price. This update comes as the group is set to publish its half-year results on July 29, an event that could provide more visibility on the growth trajectory of the Parisian saddler. The decline in the stock is part of an unfavorable environment for European luxury. The CAC 40 is down 1.05% in the session, at 8,141 points, while the SBF 120 loses 1%. L'Oréal drops 0.78% at the same time. Across the Atlantic, Ralph Lauren fell by 1.11% at the last close. The surge in oil above $106 a barrel, fueled by tensions in the Strait of Hormuz, revives inflation fears that could weigh on global discretionary consumption.

Technical Analysis of Hermès Stock

From a chart perspective, Hermès' share price is significantly below its 50-day and 200-day moving averages, which are respectively at €1,845.92 and €2,066.84. This significant gap — more than €210 below the 50-day moving average — indicates a bearish trend that has been established for several weeks. The stock is also at 27% of the width of its Bollinger Bands, meaning it is in the lower part of its channel, between a lower bound at €1,572.96 and an upper bound at €1,797.32. The nearest technical support is at €1,609, a level towards which the stock could head if selling pressure continues. A breach of this threshold downwards would be an additional sign of weakness. Conversely, the identified resistance at €1,920.50 remains far from the current price, illustrating the extent of the path to travel for a potential bullish reversal. The next fundamental catalyst remains the publication of third-quarter sales figures, scheduled for October 22.