H&M: RBC raises TP

(CercleFinance.com) - On Monday Royal Bank of Canada announced that it has raised its target price for H&M shares from 170 SEK to 180 SEK, while maintaining its "sector perform" (hold) rating on the stock.


In its comments on the European apparel sector, RBC praises the recent efforts undertaken by the Swedish group, which is now "aggressively" focusing on improving profitability at the expense of sales growth.

The analyst says that H&M has several levers at its disposal to increase its gross margin in Q4 - either by raising prices, reducing freight costs or making better anticipated sourcing decisions.

The broker therefore sees the potential for pleasant surprises in the consensus, even though it is cautious about future sales trends in view of its weaker price competitiveness.



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