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Bloomberg
Hermes International is set to join one of Europe’s main equity benchmarks, an inclusion that will further bolster the French luxury company’s visibility among investors.
Hermes, the maker of Kelly and Birkin handbags will replace Universal Music Group NV in the Euro Stoxx 50, index operator Qontigo said in a statement. The change will be effective as of December 20.
The inclusion is further evidence of the big-brand status of Hermes, which wasn’t even a member of France’s benchmark CAC 40 Index until
June 2018.
Like peer LVMH, which owns Louis Vuitton and Dior, the company has been benefiting from a boom in luxury demand that accentuated during the coronavirus pandemic.
“Hermes represents quality,†says Cedric Ozazman, chief investment officer at Reyl & Cie. “It has one of the highest Ebit margins in the discretionary universe and it’s able to resist in recessions†while generating “strong and recurrent top-line growth in boom phases,†he added.
Hermes shares have rallied 90% so far this year as of Wednesday’s close, giving the company a market value of 176 billion euros ($199 billion).