H&M shares fall in Stockholm; analysts foresee a slowdown in profits
(Il Sole 24 Ore Radiocor) - A tough day for Hennes & Mauritz on the Stockholm Stock Exchange, weighed down by analysts’ assessments. The clothing giant’s share price has been affected by a downgrade from Handelsbanken, which lowered its recommendation on H&M from ‘buy’ to ‘hold’, whilst keeping its target price of 190 kronor unchanged. The bank justified the decision by citing a slowdown in earnings growth and the lack of positive catalysts following a 47 per cent rise in the share price (including dividends) over the last 14 months.
Although margins have recovered, sales remain fragile and experts note that increased investment in technology is expected to limit earnings growth potential. Earnings estimates for the 2026/2027 and 2027/2028 financial years have been revised downwards by 2–3 per cent, and Handelsbanken’s forecasts are now in line with the market consensus.
Sentiment towards H&M is also heavily influenced by JP Morgan’s assessment, which remains negative on the share, with a ‘sell’ recommendation and a target price unchanged at 114 Swedish kronor. On Tuesday, analysts at RBC Capital Markets confirmed their ‘Neutral’ view on the share, with a target price unchanged at 175 kronor. RBC has revised its forecasts for H&M, predicting a slight decline in like-for-like sales and an increase in operating expenses in the second half of the financial year, partially offset by an expected improvement in the gross margin.
