H&M: Invest Securities adjusts target price

(CercleFinance.com) - The analyst points out that since 16 March the H&M share price has fallen by 13%, which he says reflects the boycott campaign that the group has suffered from in China, in addition to the sanitary restrictions.


The broker says that Q1 results are in line with its expectations, apart from a pleasant surprise in terms of opex. These factors have led it to raise its 2020/21e NAV (+4.5%), albeit with no impact thereafter.

However, the broker reiterates its sell rating on the stock, given: 1) the lack of visibility on the situation in China, with implications on sourcing and sales, and 2) the uncertainty that sanitary conditions are causing in Europe.

The broker has nudged up its target price marginally to 160 Swedish kronor from 159 Swedish kronor, with the analyst taking into account the increase in its beta coefficient (1.2 compared to 1.15 previously) due to uncertainty in China, which has led it to raise its WACC to 6.31% (compared to 6.11% previously).

The H&M share is down about 3.5% on Thursday morning.



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