BNP Paribas Exane analysts have upgraded Hermès International to “outperform,” highlighting its resilient business model and strong growth prospects amid challenges in the luxury sector. While companies like LVMH and Kering have struggled with sliding demand, particularly linked to China’s economic slowdown, Hermès has remained stable due to its long waiting lists and price increases in its leather goods division.

Analysts Antoine Belge and Melania Grippo noted that Hermès’ defensiveness makes it a reliable choice for investors looking to hedge against short-term downturns in the luxury market. As a result, Hermès shares rose by as much as 1.5% in early trading, contrasting with other luxury stocks that face near-term challenges. Meanwhile, Exane downgraded Swatch Group AG to underperform, which caused the Swiss watchmaker’s shares to drop 0.9% on Tuesday.