Fact based stock research
H&M Hennes & Mauritz (OM:HM B)

SE0000106270

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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H&M Hennes & Mauritz stock research in summary

hmgroup.com

ANALYSIS: With an Obermatt Combined Rank of 29 (worse than 71% compared with investment alternatives), H&M Hennes & Mauritz (Apparel Retail, Sweden) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of H&M Hennes & Mauritz are low in value (priced high) with a consolidated Value Rank of 30 (worse than 70% of alternatives), and are riskily financed (Safety Rank of 34, which means above-average debt burdens) but show above-average growth (Growth Rank of 61). ...read more

RECOMMENDATION: A Combined Rank of 29, is a hold recommendation based on H&M Hennes & Mauritz's financial characteristics. As the company H&M Hennes & Mauritz shows low value with an Obermatt Value Rank of 30 (70% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 61% of comparable companies (Obermatt Growth Rank is 61). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 34 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for H&M Hennes & Mauritz, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	30
Growth Rank	61
Safety Rank	34
Combined Rank	29

Country	Sweden
Industry	Apparel Retail
Index	Dividends Europe, Employee Focus EU, Diversity Europe, Human Rights, Renewables Users, OMX 30
Size class	XX-Large

This stock has achievements: Insight 2018-06-21, Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: H&M Hennes & Mauritz

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	15	65	26	30
GROWTH
GROWTH	55	95	69	61
SAFETY
SAFETY	22	53	50	34
SENTIMENT
SENTIMENT	n/a	21	49	^new
360° VIEW
360° VIEW	n/a	75	52	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Aug-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better H&M Hennes & Mauritz is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	15	65	26	30
GROWTH
GROWTH	55	95	69	61
SAFETY
SAFETY	22	53	50	34
COMBINED
COMBINED	16	96	40	29

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of H&M Hennes & Mauritz the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 30 (worse than 70% compared with alternatives), H&M Hennes & Mauritz shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for H&M Hennes & Mauritz. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 75% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 27 which means that the stock price compared with what market professionals expect for future profits is higher than 73% of comparable companies, indicating a low value concerning H&M Hennes & Mauritz's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 27 which means that the stock price compared with what market professionals expect for future profit levels is higher than 73% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 16 is also low. Compared with invested capital, the stock price is higher than for 84% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 30, is a hold recommendation based on H&M Hennes & Mauritz's stock price compared with the company's operational size and dividend yields. Should dividend investors pick H&M Hennes & Mauritz? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose H&M Hennes & Mauritz only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	35	41	25	27
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	43	41	21	27
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	18	38	15	16
DIVIDEND YIELD
DIVIDEND YIELD	1	84	82	75
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	15	65	26	30

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of H&M Hennes & Mauritz; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), H&M Hennes & Mauritz shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for H&M Hennes & Mauritz. Profit Growth, with a rank of 67 (better than 67% of its competitors), and Capital Growth, with a rank of 69, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 27, which means that, currently, professionals expect the company to grow less than 73% of its competitors, and Stock Returns are at a rank of 46. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	32	53	18	27
PROFIT GROWTH
PROFIT GROWTH	31	100	98	67
CAPITAL GROWTH
CAPITAL GROWTH	n/a	80	22	69
STOCK RETURNS
STOCK RETURNS	51	57	92	46
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	55	95	69	61

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of H&M Hennes & Mauritz.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company H&M Hennes & Mauritz has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of H&M Hennes & Mauritz is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for H&M Hennes & Mauritz. Liquidity is at 75, meaning the company generates more profit to service its debt than 75% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 36, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 64% of its competitors. Leverage is also high at a rank of 21, which means that the company has an above-average debt-to-equity ratio. It has more debt than 79% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), H&M Hennes & Mauritz has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	50	44	37	21
REFINANCING
REFINANCING	29	61	34	36
LIQUIDITY
LIQUIDITY	55	48	82	75
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	22	53	50	34

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of H&M Hennes & Mauritz and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	13	9	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	26	52	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	82	69	^new
MARKET PULSE
MARKET PULSE	n/a	42	62	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	21	49	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for H&M Hennes & Mauritz.
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