We are maintaining our fair value estimate for no-moat Hennes & Mauritz as the company reported declining sales but stronger profitability in the first quarter. After rallying 13% intraday, shares look slightly undervalued.
H&M benefits from scale advantages against smaller peers as the number-two apparel supplier in Europe and number three globally.
H&M may be too slow in trimming its store base, which could present a drag on profitability as business shifts online and store productivity falls.
|
Metric
|
HM B
|
GPS
|
URBN
|
|---|---|---|---|
Price/Earnings (Normalized) | 30.58 | 13.87 | 11.87 |
Price/Book Value | 6.11 | 2.83 | 1.69 |
Price/Sales | 1.22 | 0.50 | 0.70 |
Price/Cash Flow | 9.29 | 7.22 | 5.32 |
|
Metric
|
HM B
|
GPS
|
URBN
|
|---|---|---|---|
Quick Ratio | 0.60 | 0.71 | 0.54 |
Current Ratio | 1.20 | 1.42 | 1.29 |
Interest Coverage | 9.52 | 6.22 | 47.72 |
|
Metric
|
HM B
|
GPS
|
URBN
|
|---|---|---|---|
Return on Assets (Normalized) | 5.25% | 4.85% | 7.80% |
Return on Equity (Normalized) | 19.88% | 22.84% | 15.69% |
Return on Invested Capital (Normalized) | 9.19% | 6.69% | 9.67% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
HMRZF
| Hennes & Mauritz AB Class B | — | Qtkksk | $25.8 Bil | |
HNNMY
| Hennes & Mauritz AB ADR | — | Vtgzgh | $25.8 Bil | |
MONRY
| Moncler SpA ADR | — | Qjc | $18.5 Bil | |
RL
| Ralph Lauren Corp Class A | Wkkgjwh | Tlsnc | $10.5 Bil | |
PVH
| PVH Corp | Bcyybsrj | Bxj | $6.3 Bil | |
GIL
| Gildan Activewear Inc | Ssytwhzl | Tch | $5.8 Bil | |
VFC
| VF Corp | Pmzvybbt | Dphltj | $4.7 Bil | |
UAA
| Under Armour Inc Class A | Lvwtpql | Fgtj | $2.8 Bil | |
UA
| Under Armour Inc Class C | Mpsrkwgth | Ckcv | $2.8 Bil | |
HBI
| Hanesbrands Inc | Gjllqqvy | Nkkdjz | $1.6 Bil |
