02:02 AM EDT, 04/21/2026 (MT Newswires) -- RBC Capital Markets updated its model for Hermès International (RMS.PA), adjusting earnings estimates following the French luxury goods group's first-quarter results.

"Hermes 1Q26 results were slightly below expectations, with a modest miss in Leather Goods, and softer delivery in Europe and APAC, partly offset by strong Americas. Management confirmed production phasing headwinds in 1Q26 and [reiterated] the expectation of +6% volume growth in FY26E, which is encouraging and implies a sequentially improving top line post 1Q. Slight reduction to organic revenue assumptions, offset by less negative FX results in broadly unchanged earnings estimates. We maintain our positive view on Hermes, underpinned by anticipated acceleration in Leather Goods organic (+6% volumes, +6% price) and attractive 32x CY27E P/E valuation,"according to a Monday note.

The luxury goods company's revenue for the three months ended March 31 was 4.07 billion euros, up 5.6% organically but 2% behind the consensus forecast of 7.1% and in line with RBC's 5.9% estimate.

Against this backdrop, the research firm reduced its full-year 2026 organic revenue growth assumption to 7.3% from 8.1% and trimmed its EBIT margin projection to 39.6% from 39.9% on "slightly higher"operating expense inflation. Analysts noted that their 2026 to 2028 forecasts remain 1% to 2% below consensus on revenue and 3% to 4% behind on EPS.

RBC rates the stock at outperform, with a price target of 2,100 euros.