H&M: RBC downgrades to neutral
(CercleFinance.com) - RBC announced on Wednesday that it had downgraded its H&M shares from 'outperform' to 'sector perform', with a target price reduced from 185 SEK to 165 SEK.
While the Canadian broker is impressed by the Scandinavian clothing company's efforts to revive its performance, it is concerned that the turnaround may take longer than expected.
In its opinion, the clothing group will have to face many headwinds next year, not only on the economic front but also in terms of competition.
As a result, it has reduced its earnings estimates by 7% to 8%, to around 10% below consensus.
With a P/E of around 19x for 2025, RBC considers the stock's valuation to be "reasonable", although not sufficiently attractive to justify an "outperform" rating.
Indeed, the broker explains that it expects the stock to struggle to initiate an upward movement until market earnings forecasts are revised upwards.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.
While the Canadian broker is impressed by the Scandinavian clothing company's efforts to revive its performance, it is concerned that the turnaround may take longer than expected.
In its opinion, the clothing group will have to face many headwinds next year, not only on the economic front but also in terms of competition.
As a result, it has reduced its earnings estimates by 7% to 8%, to around 10% below consensus.
With a P/E of around 19x for 2025, RBC considers the stock's valuation to be "reasonable", although not sufficiently attractive to justify an "outperform" rating.
Indeed, the broker explains that it expects the stock to struggle to initiate an upward movement until market earnings forecasts are revised upwards.
Copyright (c) 2024 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.