For today’s bulletin, we take a look at budget fashion retalier H&M $HNNMY. We also provide a link to download a FREE STOCK REPORT on the company. We have reinstituted our Valuation Watch.
VALUATION WATCH: Overvalued stocks now make up 61.86% of our stocks assigned a valuation and 25.7% of those equities are calculated to be overvalued by 20% or more. Fourteen sectors are calculated to be overvalued. Because overvaluation is now calculated to be above 60%, we have reinstituted our valuation watch.
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Retail has been a hot topic lately as the sector is undergoing lots of change and chaos. Old style brick and mortar retailers are hemorrhaging jobs and profits as they come under increasing assault from companies that can operate on the internet and provide the convenience of home delivery. That has been the story even as the media and Donald Trump focus on workers in even more anachronistic fields–like coal mining.
However, for a long time some retailers seemed like they might be immune from this assault. One such retailer was H&M. H & M Hennes & Mauritz AB (HNNMY) offers fashion products with a broad and varied selection for women, men, teens and children through retail outlets mainly in Europe. The Company also sells its products via catalogues and the Internet. The women’s collection includes basics to tailored classics, sportswear, maternity clothes, accessories and shoes. The men’s collections include tailored pieces, modern basics, leisure wear accessories, underwear and shoes. The jeans & denim includes traditional five-pocket jeans, trendy fashion jeans and denim models in organic cotton. H&M’s cosmetics department provides a wide range of makeup, skin care and body care products. H & M Hennes & Mauritz AB is a subsidiary of Ramsbury Invest AB and is headquartered in Stockholm, Sweden.
Stores like H&M provided shoppers in urban areas with access to low-cost fashions that were almost “throwaway” in nature. Buy clothing that was in fashion, but cheap and imported. However, we see from their latest results that even companies such as H&M are in trouble as internet competitors like Amazon-and even cheaper alternatives such as the numerous china-based web somerset the demands of the market and cut out the middleman.
H&M, whose margins were already based on cheaper products, had to discount even more this Summer in an effort to keep sales up. They also suffered from reduced foot traffic in their stores. Analysts note that they have failed to address the online sale issue, and while their web sales are growing–they now make up @25-30% of total sales, it has not been enough to compensate for lower sales in their brick and mortar outlets.
Company CEO Karl-Johan Persson noted that “the fashion retail sector is growing and is in a period of extensive and rapid change as a result of ongoing digitization. The competitive landscape is being redrawn, new players are coming in and customers’ behavior and expectations are changing, with an ever greater share of sales taking place online.”
Sound familiar? That’s been the story for so many retailers lately. And what is the proposed remedy–in addition to increasing onlines sales? Moving into higher-end fashions that provide higher profit margins. Hmmm, we’ll see.
For now, ValuEngine continues its HOLD recommendation on H&M for 2017-09-27. Based on the information we have gathered and our resulting research, we feel that H&M has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Book Market Ratio.
You can download a free copy of detailed report on H & M Hennes & Mauritz AB (HNNMY) from the link below.
| ValuEngine Forecast | ||
| Target Price* |
Expected Return |
|
|---|---|---|
| 1-Month | 5.42 | -0.15% |
| 3-Month | 5.44 | 0.20% |
| 6-Month | 5.37 | -1.02% |
| 1-Year | 5.33 | -1.78% |
| 2-Year | 5.40 | -0.57% |
| 3-Year | 5.55 | 2.20% |
| Valuation & Rankings | |||
| Valuation | n/a | Valuation Rank(?) | n/a |
| 1-M Forecast Return | -0.15% | 1-M Forecast Return Rank | 39 |
| 12-M Return | -5.32% | Momentum Rank(?) | 30 |
| Sharpe Ratio | -0.37 | Sharpe Ratio Rank(?) | 23 |
| 5-Y Avg Annual Return | -7.06% | 5-Y Avg Annual Rtn Rank | 32 |
| Volatility | 18.91% | Volatility Rank(?) | 72 |
| Expected EPS Growth | 40.82% | EPS Growth Rank(?) | 70 |
| Market Cap (billions) | 39.66 | Size Rank | 97 |
| Trailing P/E Ratio | 22.16 | Trailing P/E Rank(?) | 58 |
| Forward P/E Ratio | 15.74 | Forward P/E Ratio Rank | 58 |
| PEG Ratio | 0.54 | PEG Ratio Rank | 60 |
| Price/Sales | 1.75 | Price/Sales Rank(?) | 54 |
| Market/Book | 6.21 | Market/Book Rank(?) | 23 |
| Beta | 1.05 | Beta Rank | 37 |
| Alpha | -0.32 | Alpha Rank | 17 |
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