On Friday, Goldman Sachs adjusted its stance on Hennes & Mauritz AB (ST:HMb) (HMB:SS) (OTC: HNNMY), a global fashion retailer, by reducing the price target from SEK 175.00 to SEK 170.00. The firm has decided to maintain a Sell rating on the company's shares.
The revision follows the latest financial results released by H&M, which prompted the analyst to revise the company's profit before tax (PBT) estimates for the fiscal years 2024 and 2025. The new forecasts show a decrease of 13% for FY24 and 8% for FY25, setting the PBT expectations at SEK 18.6 billion and SEK 21.7 billion, respectively.
The adjusted forecasts also include changes to the expected constant currency (cFX) sales growth, now set at an increase of 1.5% for FY24 and 4.9% for FY25. These figures represent a downward revision from the previously anticipated growth rates of 2.7% and 3.2%.
In addition to sales projections, Goldman Sachs has also altered its expectations for the company's earnings before interest and taxes (EBIT) margins. The new estimates are 8.7% for FY24 and 9.5% for FY25, a decrease from the earlier projections of 9.6% and 10%.
The revised sales forecast suggests that the company's constant currency growth for FY24 and FY25 will be approximately -3% and +1.5%, respectively, when compared to the pre-Covid level.
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