RBC Forecasts 'Steady' Q3 Growth from Hermès; Price Target Down

06:57 AM EDT, 09/22/2026 (MT Newswires) -- RBC Capital Markets cut its price target for Hermès International (RMS.PA) while saying it expects the French luxury group to report "stable and steady" third-quarter earnings growth on Oct. 22. The research firm said Tuesday it projects third-quarter revenue of 4.2 billion euros, with 6% organic and 7.1% reported growth. The estimates sit 1% below consensus and imply a slight sequential slowdown from the second quarter. Leather goods are expected to be the primary division driver, while regionally, the strongest growth is expected from the Americas. "In absolute terms, Hermes' growth remains healthy, however given a more challenging luxury demand environment in 3Q based on our observations, the prospects of an improvement vs 1H26 run-rate is less likely," RBC wrote as it reduced the price target to 1,600 euros from 1,700 euros. The research firm also trimmed its full-year 2026 organic growth estimate to 6.1% from 6.7%, leading to a 1% reduction in group revenue forecasts. RBC's EPS estimate and EBIT assumptions were also down 1% to 44.59 euros and 6.69 billion euros, respectively. RBC noted that it recently downgraded its rating on Hermès to sector perform amid a "narrowing" growth differential relative to sector peers and elevated valuation risks due to the lack of expected earnings upgrades and revenue acceleration.