Equity valuation

: Hermès International SCA

Abstract

In this dissertation, a valuation of Hermès International is performed. Hermès is an apparel and accessories company, present in the luxury goods industry. Four methods were applied – Discounted Cash Flows using WACC, Dividend Discount Model, Economic Value Added and a Relative Valuation – after which, a sensitivity analysis was performed. As a result of the Discounted Cash Flows approach, a share price of 413,58€ was reached, whereas with Dividend Discount Model and Economic Value Added the share prices were 185,65€ and 344,21€, respectively. Accordingly, a Market-Perform recommendation was given. The Relative valuation is considered only as a validation tool, thus, there is no recommendation based on its results. To conclude, a comparison between the dissertation’s values and Bernstein’s report of September 15th 2016 was made, stressing the major differences between both.

Date of Award	21 Feb 2017
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)