Not convincing enough

Q2 EBITA +1% vs Infront consensus. Additional weakness within PI creates uncertainty. We lower '24e EBITA by 2% and move to HOLD (Buy).

Q2 was fine but weak orders

Essity (Buy, TP: SEK350.00) - Margin resilience in focus

We forecast sequentially higher raw material costs, only partly offset by lower energy costs, cost savings and underlying volume improvements supported by higher A&P spending, leaving our Q3e adj. EBITA largely in line with consensus. We expect the Q4 and 2025 outlook to be in focus, given most restructuring projects are due to be completed by year-end, as well as its margin resilience, capital allocation and M&A outlook now that multiples have started to normalise. We reiterate our BUY and have raised our target price to SEK350 (330) on higher estimates.

Billerud (Buy, TP: SEK150.00) - All eyes on capital allocation

We forecast significant earnings growth over the next few quarters on healthy pricing power for the European business and better volumes for the high-margin US. We also expect good earnings conversion into cash given the more cautious investment strategy in the US. We have largely maintained our earnings forecasts, and reiterate our BUY with a raised target price of SEK150 (145), reflecting our increased conviction that Billerud will address its overcapitalised balance sheet, leading to possible cash distribution for shareholders in the coming quarters on top of paying ordinary dividends.

Yara (Buy, TP: NOK425.00) - Potential upside from nat-gas and capex

We reiterate our BUY and NOK425 target price, as we believe Yara’s record-low share price of USD30 can be bolstered by: 1) further comments suggesting capex reductions, or 2) changes to EU natural gas prices over the winter. We see both scenarios as likely following recent capex comments from management and the high inherent volatility in EU natural gas prices over the winter months. We expect Yara to report a Q3 EBITDA of USD472m as the result should rise by cUSD~100m YOY. We have changed our EPS by -2 to +4% for 2024–2026e.