Citi cuts forecasts for Inditex and H&M amid coronavirus crisis

The analysts expect the epidemic to have a greater impact in Europe in the second quarter of the year, affecting the two largest European fashion groups.

mds

10 mar 2020 - 17:05

Coronavirus threatens the results of the two largest fashion retailers. Analysts at Citi have cut their forecast for both Inditex and H&M, expecting a coronavirus impact to reach Europe in the second quarter of the year.

The firm has lowered its earnings per share estimate for Inditex by 11% for 2021 and 8% for 2022 amid potential impacts of Covid-19. Citi quotes Inditex’s exposure to Southern Europe, where the crisis has grown in recent weeks.

For 2020, Citi expects a solid evolution. The firm has also lowered its price target on Inditex to 32 euros, from 36 euros, and keeps a buy rating on the shares. For H&M, Citi expects a revenue growth of just 1.5% in 2020 and a fall in its net profit of 6.3%. H&M increased its profit in 2019 for the first time in four years.