Stock Market

Fast fashion group H&M sees stock surge following rating upgrade by Morgan Stanley

Analysts at Morgan Stanley have upgraded their rating of H&M Hennes & Mauritz AB B (ST:HMb) to equal-weight from underweight following the Swedish fast fashion company’s better-than-expected first quarter profit. The analysts attributed the rating upgrade to the margin improvements at H&M, which offset weaker top-line growth. This is the latest in a series of upgrades for H&M, as Danske Bank and Credit Suisse also recently raised their respective ratings of the stock. H&M’s shares rose slightly in early European trading on Wednesday.

H&M reported a surprise income of SEK 725 million ($70 million) for the three months ended February 28, which surpassed Bloomberg’s projected loss of SEK 1.03 billion. Although H&M’s quarterly gross margin of 47.2% decreased compared to the first quarter of 2022 due to elevated purchasing costs and a strong U.S. dollar, it still exceeded projections of 45.8%. Sales rose 3% year-on-year on a local currency basis to SEK 54.87 billion, but this was below Bloomberg’s forecast of 4.21%.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button