Hennes & Mauritz AB Class B

HM B: XSTO (SWE)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	SEK 795.00	Wnjk	Hnmglynj

H&M Hit by Cost Increases, Sluggish Demand as Profits Fall; Shares Cheap, but We Prefer Inditex

Jelena Sokolova

Sep 29, 2022

We are maintaining our fair value estimate for no-moat Hennes & Mauritz as the company reported weakening revenue and profits in the third quarter, hit by discontinuation of operations in Russia and weaker consumer trends elsewhere. For now, we are comfortable with our full-year forecasts that are around 3.5% lower than average FactSet consensus estimates and imply slight margin shrinkage. We view H&M shares as attractively priced at current levels but prefer Inditex as our top pick in the sector based on the quality of its business model and valuation.

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