H&M: Seams Under Pressure; Stay Underweight

Research evidence excerpt

H&M: Seams Under Pressure; Stay Underweight

Idea

May 28, 2026 03:30 AM GMT

Morgan Stanley & Co. International plc+MH&M | Europe Grace Smalley, CFA

Equity Analyst

Seams Under Pressure; Stay Grace.Smalley@morganstanley.comCedric Norest +44 20 7425-9629

Research Associate

Cedric.Norest@morganstanley.com +44 20 7425-1462

Underweight Edouard Aubin

Edouard.Aubin@morganstanley.com +44 20 7425-3160

We stay Underweight on H&M as we see the company as Natasha Bonnet

exposed to weak consumer sentiment (=low-end of K-economy) Equity Analyst

Natasha.Bonnet@morganstanley.com +44 20 7677-5723

and any lasting inflationary cost pressures.

H&M (HMb.ST, HMB SS)

While we are understanding of H&M's long-term strategic ambition to strive Retailing - General | Sweden

towards elevating the brand (see: Elevation, Elevation, Elevation?), we believe H&M Stock Rating Underweight

is still early in this journey that will require significant patience (with brand Industry View In-Line

Price target SKr 120.00

elevation strategies often taking time) and investment amid a highly competitive Shr price, close (May 27, 2026) SKr 165.45

52-Week Range SKr 194.30- 124.30

apparel backdrop. As a result, we do not believe H&M yet has the fashion product

Mkt cap, curr (mn) SKr 265,387

credibility (unlike an ITX) to drive a compelling full-price spending catalyst for Net debt (11/26e) (mn)* SKr 58,669

EV, curr (mn)* SKr 322,026

consumers amid a challenging discretionary backdrop. H&M is instead vulnerable to

fragile consumer sentiment and the K-economy (a key theme of our luxury * = GAAP or approximated based on GAAP

Fiscal Year Ending 11/25 11/26e 11/27e 11/28e

conference last week) in our view. This is likely to lead to an ongoing need for

Sales / Revenue (SKr 228,285 222,910 228,483 229,625