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
|
URBN
|
GPS
|
|---|---|---|---|
Price/Earnings (Normalized) | 29.49 | 11.41 | 14.67 |
Price/Book Value | 5.89 | 1.63 | 3.00 |
Price/Sales | 1.18 | 0.68 | 0.53 |
Price/Cash Flow | 8.96 | 5.12 | 7.64 |
|
Metric
|
HM B
|
URBN
|
GPS
|
|---|---|---|---|
Quick Ratio | 0.60 | 0.54 | 0.71 |
Current Ratio | 1.20 | 1.29 | 1.42 |
Interest Coverage | 9.52 | 47.72 | 6.22 |
|
Metric
|
HM B
|
URBN
|
GPS
|
|---|---|---|---|
Return on Assets (Normalized) | 5.25% | 7.80% | 4.85% |
Return on Equity (Normalized) | 19.88% | 15.69% | 22.84% |
Return on Invested Capital (Normalized) | 9.19% | 9.67% | 6.69% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
HMRZF
| Hennes & Mauritz AB Class B | — | Bfxvbqt | $25.1 Bil | |
HNNMY
| Hennes & Mauritz AB ADR | — | Ngxbhbw | $25.1 Bil | |
MONRY
| Moncler SpA ADR | — | Rtdp | $18.9 Bil | |
RL
| Ralph Lauren Corp Class A | Wlwkbxd | Sprls | $10.1 Bil | |
PVH
| PVH Corp | Qrzvksch | Vvtd | $6.1 Bil | |
GIL
| Gildan Activewear Inc | Wxqjclvsb | Ptb | $5.9 Bil | |
VFC
| VF Corp | Ycjtspfl | Wcmgg | $4.9 Bil | |
UAA
| Under Armour Inc Class A | Gjxwxbpx | Xgd | $2.8 Bil | |
UA
| Under Armour Inc Class C | Qxrhhxcmc | Zfpy | $2.8 Bil | |
HBI
| Hanesbrands Inc | Wklmwbtr | Ccvmz | $1.7 Bil |
