Huhtamaki (Buy, TP: EUR47.00) - Good risk/reward
Huhtamaki is one of our top picks going into 2025 due to our expectations of growing volume momentum and self-help efficiencies, fuelling 8% YOY clean EBIT expansion (c3% above post-Q3 consensus on c2% higher sales estimate) at an undemanding NTM EV/EBIT of c11.5x, c20% below its historical average and c10% below the sector average. For Q4e, we expect a continued drag from Foodservice EAO, but are c3% above consensus on clean EBIT, mostly due to North America. We reiterate our BUY and EUR47 target price.Huhtamaki is engaged in the packaging for food and drink. Co. and its subsidiaries have the following four segments: Foodservice Europe-Asia-Oceania, which provides single and double wall paper cups, paper and plastic plates and bowls, plastic cups, cutlery, and food-to-go packaging; North America, which serves local markets in North America with Chinet® disposable tableware products, foodservice packaging products, as well as ice cream containers and other consumer goods packaging products; Flexible Packaging, which produces packaging and labels; and Molded Fiber, which uses recycled fiber to make egg cartons and trays, fruit trays and cup carriers, as well as other protective packaging.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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