Hermès International
RMS.FP
pitch
short
Rolf Heitmeyer
Thesis
Hermès is trading at 35x 2015 consensus earnings estimates, which are projected to be an all-time high. Given the potential for a slowdown in the Chinese economy, which accounts for a significant portion of luxury sales, investors may be disappointed by future revenue and margin growth. Additionally, the technical support for the shares has been reduced following LVMH's failed takeover attempt, increasing the risk of a sharp decline in stock price if the company underperforms.
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