Hermès Shares Jump 3% but Remain Oversold After a Yearly Decline of 31%
On Wednesday, Hermès International's stock price reached 1,657.50 euros, marking an increase of 3.01% from the previous day's close of 1,609 euros. This surge occurs amidst a broader rebound of the CAC 40, which is up 2.08% during the session. However, over the past three months, the stock of the Parisian saddler has still declined by nearly 22%.
Technical Analysis of Hermès International
Wednesday's rise does not fundamentally alter the technical setup of Hermès International. The price, at 1,657.50 euros, remains significantly below its 50-day moving average of 1,957.84 euros, a gap of over 15% indicating the depth of the recent correction. The Relative Strength Index (RSI), a measure of the velocity and magnitude of price movements, is at 21, a level considered an intense oversold zone. An RSI below 30 generally suggests that selling pressure has been strong and that a technical rebound could occur, which appears to be the case today. Moreover, the stock has precisely rebounded from its support threshold at 1,609 euros, corresponding to the previous day's closing price. The major resistance lies at 2,118 euros, well above the current levels. Within the Paris-listed luxury sector, the day's dynamics are mixed: LVMH is up 1.52% while L'Oréal advances 1.92%, in a general market recovery movement in Paris.
Recent Analyst Perspectives on Hermès
On Sunday, March 30, two banks adjusted their outlooks on the stock. UBS significantly lowered its price target from 2,310 to 1,820 euros, while maintaining a neutral stance. This new target represents an approximate 9.8% upside potential from the current price. HSBC slightly reduced its target from 2,350 to 2,300 euros, maintaining a buy recommendation, indicating a rebound potential of nearly 39%. The notable difference between these two targets illustrates very different readings of the group's trajectory. These revisions precede an important date for the market: the publication of the first-quarter revenue on April 15, followed by the annual general meeting of shareholders two days later. These events could provide concrete insights into the resilience of demand in the luxury sector, in an environment characterized by high market stress, with the VIX reaching 31.05 at its last available reading. Over the year, the stock has recorded a decline of nearly 31%, marking one of the most significant corrections in its recent history.
