Hermès Kept at Outperform as Bernstein Anticipates 'Gradual Recovery' for Global Luxury Demand in FY26

02:38 AM EST, 01/05/2026 (MT Newswires) -- Bernstein on Monday reiterated Hermès' (RMS.PA) outperform rating, with a price target of 2,650 euros, amid the research firm's base case projection of a "gradual recovery" for international luxury demand in 2026. Analysts forecast a "steady" currency growth of 5% for the sector during the period amid assumptions of "slow U-shaped revival" in China, adjustments in pricing architecture, product newness refreshes and the sustained "resilient performance" at the high-end. "We like plain vanilla quality high-end names like Hermès... Buying Hermes on the cheap and forgetting about it is a PM's dream come true. The bear thesis on Hermès is that it would become too expensive in a luxury market that continues to flatline or decline. But if our base case scenario [materializes]: things should be better in FY26E, long-only investors would come back to the sector, [and] the Hermès share price should move upwards. Same as it did at the exit from Covid," according to the research firm's global luxury goods outlook report. Ahead of the French luxury group's 2025 results, Bernstein revised its financial model, including "slightly" reducing their fourth-quarter estimates to reflect "weak" sell-in at Hermès' perfume distributors and the absence of key ready-to-wear selling events in the previous quarter. The research firm also updated its 2026 projections to account for a protracted U-shaped recovery, a slight reduction in anticipated like-for-like pricing growth, a possible extension of the 2025 "exceptional" corporate tax rise in France and "more limited" currency pass-through. As such, Bernstein's EPS forecasts for 2025 and 2026 are -1% below and +2% above market expectations, respectively.