H&M Adjusts Valuation Amid Declining Profit and Rising Leverage Concerns

H&M Hennes & Mauritz AB has recently undergone an adjustment in its evaluation, reflecting notable shifts in its financial metrics. The company's valuation grade has been revised, indicating a change in its perceived worth within the market. Key indicators such as the P/E ratio stand at 26, while the Price to Book Value is reported at 7.10. The EV to EBIT and EV to EBITDA ratios are 16.27 and 7.43, respectively, suggesting a complex financial landscape.
In terms of profitability, H&M's return on equity (ROE) is at 27.66%, which, alongside a dividend yield of 28.62%, positions the company within a competitive framework. However, the recent quarter ending in May 2025 showed a net profit of SEK 4,567 million, reflecting a decline of 27.35%. Additionally, the debt-equity ratio has reached a high of 157.63%, indicating increased leverage.

The technical indicators present a mixed picture, with the MACD showing mildly bearish signals on a weekly basis, while the monthly outlook remains bullish. Overall, the adjustments in H&M's evaluation highlight the complexities of its current market position and financial health.

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