Sept. 17 (Bloomberg) -- Hennes & Mauritz AB, Europe’s second-biggest clothing retailer, advanced to a record high in Stockholm trading as Swedbank AB upgraded its rating.
H&M gained as much as 2.5 percent to 265.7 kronor, reaching a new high after rising to a record yesterday. Today’s advance marks the fourth day of gains and the shares’ longest winning streak since June 19. The stock rose 2.2 percent to 264.9 kronor as of 11:37 a.m. local time, with trading volumes at 78 percent of the daily average in the past three months.
Swedbank raised its rating on H&M to buy from neutral following “impressive” August sales, Christian Anderson, an analyst at Swedbank in Stockholm, said in a note to clients today. The clothing retailer yesterday reported revenue figures for August and the third quarter that beat analysts’ estimates
“In our view, this indicates that the company is gaining market share and that the autumn collection is strong, which bode well for sales and margins in the short-term,” Anderson said. “We believe improved earnings momentum, large European exposure, the recent launch of online sales in the U.S. and the favorable long-term growth outlook is likely to support the share price going forward.”
After Swedbank’s upgrade, H&M is now rated buy by 30 percent of the 37 analysts that cover the stock and who share their ratings with Bloomberg, with 32 percent having hold ratings and 38 percent advising clients to sell the shares.
Revenue at stores and operations open at least a year rose 4 percent in August compared with the same month last year, H&M said yesterday. The average estimate in a SME Direkt survey was for a 2.5 percent increase. H&M’s total sales in August climbed 14 percent, beating an estimate for 12.6 percent growth.
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