Sean Gallup/Getty Images News
Hennes & Mauritz (OTCPK:HNNMY) traded higher in Sweden after Deutsche Bank upgraded the apparel giant to a Buy rating after having it set at sell.
Anayst Adam Cochrane said the potential for structural improvement at H&M (OTCPK:HNNMY) is not being fully recognized by the market. “Credit has been granted for a normalization in sales and margins but, in our view, structural earnings growth will be higher driven by increased sales densities from improved fashionability, store refurbishments, better inventory management combined with ongoing supply chain improvements and cost management,” he noted. Cochrane and his team noted that the path to investor rehabilitation rarely runs smoothly, but see the sell-off after first-half results were posted as an opportunity for investors to revisit the H&M (OTCPK:HNNMY) investment case. Looking ahead, Deutsche Bank sees the growth algorithm for a strong EPS CAGR from 2024 to 2027 combining with a 4% dividend yield for a strong overall return.
Shares of Hennes & Mauritz (OTCPK:HNNMY) was up 2.25% in afternoon trading in Stockholm.