H&M: shares jump after Credit Suisse upgrade.
(CercleFinance.com) - Shares in Hennes & Mauritz jumped on Monday after Credit Suisse upgraded its rating on the stock from "underperform" to "outperform," seeing potential for "self help.
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Credit Suisse believes that the Swedish group's potential for margin recovery in 2018 through reduced markdown and lower US dollar costs is "not fully appreciated."
"Given the elevated short position, if H&M delivers anything close to the 18% EPS growth we forecast for next year, we believe that the shares will re-rate from multi-year lows," the brokerage firm said.
"If H&M can clear its excess inventory over the next three quarters it will go into 2018 clean for the first time in three years", it added.
Credit Suisse has therefore raised its target price for the stock from 185 Swedish kronor to 240 Swedish kronor.
H&M shares are currently up 3% at 208 Swedish kronor on the Nasdaq Nordic market.
Other major European fashion retailers are also trading higher today, including Inditex, which is up 1.4% in Madrid.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
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Credit Suisse believes that the Swedish group's potential for margin recovery in 2018 through reduced markdown and lower US dollar costs is "not fully appreciated."
"Given the elevated short position, if H&M delivers anything close to the 18% EPS growth we forecast for next year, we believe that the shares will re-rate from multi-year lows," the brokerage firm said.
"If H&M can clear its excess inventory over the next three quarters it will go into 2018 clean for the first time in three years", it added.
Credit Suisse has therefore raised its target price for the stock from 185 Swedish kronor to 240 Swedish kronor.
H&M shares are currently up 3% at 208 Swedish kronor on the Nasdaq Nordic market.
Other major European fashion retailers are also trading higher today, including Inditex, which is up 1.4% in Madrid.
Copyright (c) 2017 CercleFinance.com. All rights reserved.