H&M Falls After Nordea Cuts Rating to Sell: Stockholm Mover
Hennes & Mauritz AB (HMB), Europe’s second-largest clothing retailer, fell the most in two weeks in Stockholm trading after Nordea Bank AB cut its rating on the company to sell from buy and reduced its price estimate.
The shares declined as much as 2 percent, the biggest intraday drop since Feb. 26. The stock slipped 1.3 percent to 234.40 kronor as of 11:05 a.m. local time, giving the Stockholm- based company a market value of 393 billion kronor ($61.4 billion.)
H&M shares have gained 10 percent since Nordea upgraded the shares to buy in November and with limited scope for earnings growth in the first half of this year, the bank sees a lack of near-terms triggers, analysts Stefan Stjernholm and Stellan Hellstrom said in a note to clients. The “long-term story is intact” and tough market conditions in Europe and limited online exposure will probably hamper sales, they said.
“H&M’s limited exposure to online is likely to hold back sales momentum until the company can offer online sales in all its market, which we do not expect until 2015,” they said.
Nordea lowered its price estimate on the stock to 220 kronor from 260 kronor.
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