H & M Hennes & Mauritz AB (publ) Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Last week saw the newest quarterly earnings release from H & M Hennes & Mauritz AB (publ) (STO:HM B), an important milestone in the company's journey to build a stronger business. Revenues were kr57b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of kr2.58 were also better than expected, beating analyst predictions by 14%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for H & M Hennes & Mauritz from 25 analysts is for revenues of kr229.4b in 2027. If met, it would imply an okay 3.9% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be kr8.28, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr228.7b and earnings per share (EPS) of kr8.35 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Check out our latest analysis for H & M Hennes & Mauritz
The analysts reconfirmed their price target of kr155, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values H & M Hennes & Mauritz at kr200 per share, while the most bearish prices it at kr114. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting H & M Hennes & Mauritz's growth to accelerate, with the forecast 3.1% annualised growth to the end of 2027 ranking favourably alongside historical growth of 1.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 4.0% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, H & M Hennes & Mauritz is expected to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that H & M Hennes & Mauritz's revenue is expected to perform worse than the wider industry. The consensus price target held steady at kr155, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for H & M Hennes & Mauritz going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for H & M Hennes & Mauritz that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.