Brand company New Wave is replacing H&M as Handelsbanken's sector favorite in Consumer Discretionary Goods and Services. The bank has also upgraded its recommendation for New Wave from hold to buy, with a target price of 160 kronor (previously 120).

"After a period of heavy investment, New Wave is entering a phase where both market conditions and margins are expected to improve. The teamwear initiative, especially in the USA, is creating a new structural growth engine while investment levels are gradually declining. As the stock has performed relatively weakly since the summer and we see potential for both increased market share and higher profitability going forward, we have raised our recommendation to Buy," writes Handelsbanken.

The bank states it remains positive on H&M (buy recommendation), but after the share price increase over the past six months, it assesses that the upside is greater in New Wave.

The stocks included in the Sector Favorites are SSAB, Lundin Mining, Epiroc, Atlas Copco, Skistar, New Wave, Mowi, AAK, Genmab, Xvivo, Nordnet, Nordea, Mycronic, Dynavox, Paradox, Telenor, Castellum, and Pandox.