Electrolux (Buy, TP: SEK250.00) - In the eye of the storm
Having faced substantial headwinds in Q3, we were impressed by the reported 5.3% EBIT margin. The storm is still raging in Q4, but should abate in 2022e. With relentless focus on implementing price rises, we expect Electrolux to continue to offset the headwinds near-term. For 2022, an improved product mix and lower costs should drive further earnings growth. In addition, we estimate a c4.5–5% dividend yield and c8% share buy-back rate throughout our forecast period. We reiterate our BUY and SEK250 target price.AB Electrolux sells home appliance for households and businesses, with products such as refrigerators, dishwashers, washing machines, cookers, vacuum cleaners, air conditioners and small domestic appliances under brands such as Electrolux, AEG, Zanussi, Frigidaire and Electrolux Grand Cuisine. Co. has six segments: Major Appliances Europe, Middle East and Africa; Major Appliances North America; Major Appliances Latin America; Major Appliances Asia/Pacific; and Small Appliances, which comprise the products for consumer durables market; and Professional products. Co.'s professional products include food-service equipment for hotels, restaurants and institutions, as well as laundry equipment.
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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