2025-06-11-花旗集团-海恩斯莫里斯（HMB）_海恩斯莫里斯（Hennes_Mauritz）_模型更新_12页_404kb

H&M Faces Downgrade in Citi Research Forecast

Citi Research maintains its Sell recommendation for H&M (HMb.ST) despite updates to its financial forecasts. The analysis, dated June 12, 2025, reflects a revised outlook for fiscal year 2025 and 2026, with a target price of SEK111.00 unchanged.

• Forecast Changes: Sales and earnings per share (EPS) forecasts are lowered primarily due to the strengthening Swedish Krona and weaker-than-expected February-June 2025 FX sales (flat vs. +2.3% previously). This results in a -1%/ -2% lower sales outlook for the respective fiscal years. Gross margin is expected to decline by 200 basis points in 2025, reflecting increased sourcing costs from USD weakness, but these benefits are modeled from the third quarter onwards.

• Rationale: The Sell rating persists, citing concerns over insufficient sales momentum to counteract gross margin volatility and SG&A inflation, which could erode value.

• Valuation: The target price remains SEK111.00, based on a 2-year forward P/E regression and stable earnings projections.

• Risks: Factors include cyclical consumer demand, supply chain disruptions, FX risk, legislative changes, IT failures, and family ownership influences. Any deviation could affect performance relative to the target price.

Summary: Citi's analysis highlights external challenges and lacks confidence in H&M's ability to drive growth, reinforcing the Sell stance.