Citi Reaffirms Sell Rating on Hennes & Mauritz AB, Predicts Modest Sales Growth in Q3 2024
Citi has reaffirmed its Sell rating on Hennes & Mauritz AB (HMB:SS) (OTC: HNNMY) with a SEK143.00 price target. The bank's analysis indicates a modest +1% constant currency sales growth for the third quarter of 2024, which is lower than the consensus expectation of +3.2%. Despite easier comparisons in July and August, Citi forecasts a decline in earnings before interest and taxes (EBIT) compared to the consensus estimates for both Q3 and the full year 2024.
InvestingPro Insights:
- H&M has a market capitalization of $25.8 billion and operates with moderate debt levels.
- The company's P/E ratio is 23.92, considered low relative to its earnings growth.
- H&M's gross profit margin is 53.16% with an operating income margin of 7.73%.
- Analysts predict profitability for H&M this year with positive EBITDA growth and return on assets.
- Additional InvestingPro Tips on H&M, including dividend yield and price performance analysis, are available for investors.
Analysis: Citi's cautious stance on H&M's financial performance suggests that the retailer's stock may underperform. Investors should consider the bank's Sell rating and price target, along with the real-time data from InvestingPro, to make informed decisions about their investments in H&M. Pay attention to the company's profitability metrics and dividend yield for potential income-focused investment opportunities.