PARIS — As the global appetite for French luxury goods continues its upward climb, Hermès International is joining the Paris stock market index CAC-40, replacing cement-maker LafargeHolcim, according to Euronext.
The stock market operator reviews the makeup of the benchmark index on a quarterly basis, selecting the 40 largest companies with the most actively traded shares. The possibility had been well-flagged by analysts, which some said likely contributed to a recent rise in Hermès shares.
Shares in the leather goods-maker, famous for its Birkin and Kelly bags, have risen 27 percent since the start of the year.
Analysts at HSBC, in a note to clients earlier this week, lowered their rating to “reduce” after the recent surge in the share price.
“We have made the case for a while that if investors have a long enough time frame, Hermès shares could be a ‘buy and hold forever’ stock and we remain convinced of the compounding nature of the business,” HSBC said.
With 9 percent revenue growth at constant exchange rates last year, Hermès is considered one of the global luxury sector’s solid performers.