H&M Jumps as Deutsche Sees Revenue Improvement: Stockholm Mover
Hennes & Mauritz AB (HMB), Europe’s second-biggest clothing retailer, reached its highest price in ten months in Stockholm trading after Deutsche Bank AG upgraded its stock rating and said earnings growth will accelerate.
The shares gained as much as 4.10 kronor, or 1.7 percent, to 242.50 kronor, the highest level since Sept. 26 last year. They rose 1 percent to 240.80 kronor as of 10:30 a.m. local time, bringing this year’s advance to 7.3 percent.
Deutsche Bank raised its rating on H&M to buy from hold and lifted its share-price estimate to 275 kronor from 240 kronor. While currency translation effects, disappointing same-store sales growth and decreases in H&M’s gross margin have prompted analysts to cut their earnings forecasts in the past three years, “we think these trends will stabilize and in some instances reverse over the next 18 months,” Deutsche said.
“The combination of improving macro, online rollout, better weather and FX should all now help the top line,” Charlie Muir-Sands and Warwick Okines, analysts at Deutsche Bank in London, said in a note to clients. “Near term, the gross margin outlook is also more favourable.”
To contact the reporter on this story: Katarina Gustafsson in Stockholm at firstname.lastname@example.org
To contact the editor responsible for this story: Tasneem Brogger at email@example.com