Nordea has resumed coverage of fashion giant H&M with a sell recommendation and a price target of SEK 130, following a change in the lead analyst.
The bank assesses that H&M is operating in an increasingly pressured market where the company lacks both a clear brand advantage and an undisputed price leadership position. According to Nordea, H&M is losing market share to fast-growing players in ultra-fast fashion, second-hand retail, and digital niche brands, while previous hopes for an operational turnaround appear increasingly less credible.
Nordea also considers the stock to be highly valued relative to its historical multiples, despite structural challenges and weakening earnings momentum.
As a potential upside risk, Nordea points out that the Persson family could accelerate their share purchases and orchestrate a buyout of the company significantly earlier than the bank’s base-case scenario of 2031. This would ‘force a rapid revaluation of the stock, regardless of the underlying fundamentals’, Nordea writes.
H&M shares are down 2.2 percent.
