RBC cuts Hermes on 'converging' growth premium
BUZZ-RBC cuts Hermes on 'converging' growth premium ** RBC cuts French luxury house Hermes HRMS.PA to "sector perform" from "outperform" as its outsized growth rate compared to industry peers moderates
** "The growth premium that justified its valuation premium vs the sector is converging," RBC says
** The brokerage expects higher reliance on the leather goods unit, forecasting it will contribute over 60% of revenue growth between 2025 and 2030 amid a lower outlook
** RBC adds that leather goods price contributions are likely to moderate from 2027 following a period of strong increases during the post-pandemic inflationary cycle
** Modest return on invested capital dilution from a high base limits upside, prompting the analyst to prefer peers with stronger earnings growth or valuation support
** Out of 26 analysts covering Hermes, 17 rate it "strong buy" or "buy", eight "hold" and one "sell" - LSEG data
(Reporting by Hugo Lhomedet)