Luxury stocks are having their worst year in a generation, and even Hermès — long treated as the sector’s unshakeable defensive — has been dragged into the sell-off. The French house’s shares have slumped nearly 40 per cent this year, putting it on course for its worst calendar year since its 1993 listing, and Goldman Sachs has now attached a rare “Sell” rating to the Birkin maker, arguing its high-growth era is over. In a separate sector call, Goldman initiated coverage of ten European luxury stocks, forecasting 6 per cent organic growth in 2026 and 7 per cent in 2027, with “Buy” ratings on Richemont, LVMH, Moncler and Prada — and Hermès alone carrying the sell tag.
FAKTA
- The slide: Hermès shares are down nearly 40 per cent year to date — on track for the worst year since the company’s 1993 listing, with Goldman Sachs and UBS issuing rare sell ratings.
- The valuation reset: Hermès’ forward price-to-earnings multiple has fallen to about 27 times, less than half its level in early 2025. Analyst consensus points to 6.82 per cent full-year revenue growth at constant exchange rates — the slowest since pandemic store closures in 2020.
- Goldman’s sector call: Initiating coverage of ten European luxury stocks, Goldman forecasts 6 per cent organic growth in 2026 and 7 per cent in 2027, powered by US outperformance, a Middle East rebound and stabilisation in China.
- The ratings: Buy — Richemont, LVMH, Moncler, Prada. Neutral — Burberry, Zegna, Brunello Cucinelli, Kering. Sell — Hermès.
- Next test: Hermès reports third-quarter 2026 sales on October 22; LVMH reports its third-quarter sales on October 12.
Why Goldman Is Souring on Hermès
Goldman’s argument is not that Hermès makes bad products — it is that the extraordinary growth run is finished. The bank warns that the era of sustained double-digit revenue growth is over, pointing to softness in Hermès’ non-leather lines, which lean more on aspirational buyers than on the ultra-rich core clientele.
UBS echoes the caution. The bank notes that the Birkin and Kelly waiting lists and tightly controlled supply once underpinned the brand’s resilience — but rising second-hand circulation may be cracking that shield, as more pre-owned bags flow onto the resale market and chip away at scarcity.
Target cuts have followed the downgrades. In early October, CIC cut its Hermès price target from €2,000 to €1,700, while HSBC lowered its target from €1,550 to €1,460, shifting the debate from the brand’s scarcity premium to the durability of its growth.
Goldman’s Luxury Scorecard: Four Buys, One Sell
Goldman’s broader initiation on European luxury paints a “mixed” but stabilising picture. The bank expects the post-Covid normalisation phase — market saturation plus the consequences of aggressive price increases — to give way to moderate growth, led by the United States and a mechanical rebound in the Middle East, with China stabilising and Europe remaining sluggish.
| Rating | Company | Goldman’s rationale |
|---|---|---|
| Buy | Richemont | Strength in jewellery, led by Cartier |
| Buy | LVMH | Expected rebound in leather goods in 2027 |
| Buy | Moncler | Strong margins in the US market |
| Buy | Prada | Valuation low relative to earnings generated |
| Neutral | Burberry, Zegna, Brunello Cucinelli, Kering | Cautious outlooks; Kering’s turnaround under new leadership still unproven |
| Sell | Hermès | Double-digit quarterly growth momentum has ended |
On Kering, the assessment reads almost as a prelude to a future downgrade: the turnaround plan “has yet to be demonstrated.” Only Hermès received an outright Sell — a striking call against a house that once commanded more than 40 times earnings on the strength of scarcity and margins.
Hermès Investors Brace for the October 22 Test
The next hard evidence arrives on October 22, when Hermès publishes third-quarter 2026 sales. The company reported €8.163 billion in first-half revenue and employed 27,107 people at the end of June. Investors will be watching whether the second half can support the premium still embedded in analyst models — or whether the slowdown deepens.
LVMH faces its own checkpoint sooner: third-quarter sales are due after the Paris market close on October 12, after a decline of more than 40 per cent since the start of the year. With LVMH’s market value near €188.7 billion, the October updates from Paris’ two luxury giants will set the tone for the sector into year-end — a sector whose troubles echo the broader softness in American luxury demand reported last week.
Conclusion
The message from Goldman Sachs is blunt: the golden age of effortless double-digit growth in luxury is over, and Hermès is no exception. But the bank’s sector forecast — 6 per cent growth in 2026 rising to 7 per cent in 2027 — suggests the industry is stabilising rather than collapsing, with the US, the Middle East and a steadier China doing the heavy lifting. Whether Hermès can reclaim its premium rating now hinges on hard numbers: the October 22 sales update will show if the Birkin maker’s scarcity shield still holds.
