Berenberg starts H&M with 'sell', Inditex with 'buy'

H and M Hennes and Mauritz AB

01/08/2025 09:04

** Berenberg initiates coverage on Swedish fashion retailer H&M HMb.ST with a "sell" rating, noting the company is 'squeezed' by rivals in a competitive market

** The broker states the core H&M brand, representing most of its sales, is stuck between ultra-low-price operators and mid-market retailers like Zara

** Its business model, which relies on long lead times and large volume sourcing, elevates the risk of unsold inventory and margin-eroding markdowns

** The brokerage believes H&M's long-term targets for double-digit sales growth and profit margins "do not look attainable" in the current competitive environment

** It also initiates Spanish fashion retailer Inditex ITX.MC with a "buy" rating, despite forecasting slower sales growth and negative currency impacts

** The broker argues "back to normal" growth will still outpace the market, leading to ongoing share gains in a highly fragmented global market

 (Reporting by Vera Dvorakova and Marta Serafinko)

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