H&M: RBC raises target slightly

(CercleFinance.com) - Royal Bank of Canada announced on Monday that it had raised its target price for H&M from SEK 170 to SEK 180, while maintaining its "perform in line with sector" opinion on the stock.


In a note dedicated to the European apparel sector, RBC praises the efforts recently undertaken by the Swedish group, which is now "aggressively" focusing on improving profitability to the detriment of sales growth.

From the analyst's point of view, H&M has several levers at its disposal to increase its gross margin in the fourth quarter, whether through price increases, reduced freight costs or better anticipated sourcing decisions.

As a result, the intermediary says it sees potential for positive surprises in relation to market consensus estimates, even if it is cautious about future sales trends in view of its weaker price competitiveness.

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