Jefferies has shifted its recommendation on Hermès International SCA upward, moving the French luxury house from a "hold" to a "buy" and raising its price target to €2,400 from €2,250. The brokerage framed the change around Hermès’ concentrated exposure to high-net-worth customers and a profitability profile that it sees as stronger and more stable than many competitors in the listed luxury sector.
In its assessment, Jefferies places Hermès within an "ultra-luxury" cohort alongside names such as Ferrari and Brunello Cucinelli. Within that grouping, the firm argues Hermès has a pronounced skew toward very important clients and very very important clients, with that client mix especially evident in China.
Jefferies pointed to what it described as preliminary signs of stabilization in the quota ratio in China as a factor supporting the upgrade. The brokerage set a calendar 2027 price-to-earnings multiple of 46.0x for Hermès, which it compared with a post-COVID average CY2 PE of 44.3x.
Valuation and margin profile
At the new price target of €2,400, Jefferies said the shares imply roughly a 14.4% upside from prevailing levels. The firm noted Hermès trades at a premium to much of the luxury sector, attributing that premium to higher and more persistent profitability.
Jefferies’ forecasts place Hermès’ EBIT margin at 40.0% for 2026 and 40.2% for 2027, levels the brokerage says exceed those of most listed luxury peers. For 2026, Jefferies projects underlying EBIT of €6.80 billion, representing 6.8% year-on-year growth, and group net profit of €5.05 billion, which would be an increase of 12.6% over the prior year.
On a per-share basis, diluted earnings are modelled at €47.55 for 2026 and climb to €52.12 in 2027. Dividends per share are estimated at €28.53 in 2026 and €31.27 in 2027.
Demand dynamics and regional exposure
Jefferies emphasized demand-side forces as the principal engine of growth for the luxury sector, rather than supply measures. In that context, Hermès’ customer base is described as concentrated in regions and income brackets that continue to benefit from equity market gains, amplifying the brand’s appeal during a period of uneven global wealth creation.
The report includes specific regional sales notes: APAC accounts for about 35% of Hermès sales in China and 24% in APAC excluding China, which the brokerage said places Hermès near the sector average but with a stronger tilt toward higher-spending consumers.
Jefferies also observed that Hermès’ market valuation appears to be more closely linked to its profitability profile than to near-term total shareholder return expectations.
Implications
By upgrading the shares and raising its target, Jefferies is signaling confidence in Hermès’ resilience through a luxury environment that the firm characterizes as volatile and increasingly shaped by wealth concentration. The firm’s forecasts and multiple imply continued premium valuation supported by sustained margin performance and concentrated demand from affluent client segments.