On Friday, JPMorgan (NYSE:JPM) maintained its Underweight rating on Hennes & Mauritz AB (ST:HMb) (HMB:SS) (OTC: HNNMY) stock, with a price target of SEK130.00. The firm's commentary highlighted H&M's recent launch of its Autumn/Winter collections, which was supported by increased marketing efforts, including 12 global events.
The new collections represent a strategic move to reposition the brand, a shift that was initially signaled last summer with the appointment of a new Creative Director. The objective is to introduce higher fashion content and enhance the brand's perception.
The analyst noted that brand turnarounds are challenging and require consistent delivery in fashion, quality, price perception, and ease of shopping. Although it has only been a week since the launch, JPMorgan suggests it is too soon to make definitive judgments about the brand's new direction. The firm is using data to track metrics that may indicate shifts in consumer sentiment towards H&M over time.
Additionally, JPMorgan conducted a price analysis to compare H&M and Zara prices in the UK and US markets. The comparison is part of an effort to gauge H&M's competitive positioning following the introduction of the new collections and marketing initiatives. The analysis serves as a tool for the firm to assess the potential impact of H&M's pricing strategy on its brand turnaround efforts.
The analyst's comments emphasize the importance of tracking consumer reactions and market data following significant brand initiatives like H&M's collection launch. JPMorgan will continue to monitor these metrics to evaluate the progress of H&M's brand repositioning and its effects on consumer sentiment.
The maintained Underweight rating and price target reflect the firm's cautious stance on the retailer's stock until more substantial evidence of the brand's trajectory is available.
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