Electrolux (Hold, TP: SEK160.00) - Oops!...It did it again
We have downgraded Electrolux to HOLD (BUY) but we reiterate our SEK160 target price. While 2021 was the company’s best year in modern times, 2022e seems to have been the worst (since 1981). We believe it should scrap its dividend for 2022 on the back of weak performance in North America, a cloudy outlook for consumer discretionary spending, and sharply increased debt gearing levels. While earnings should improve in H2 2023, we see an elevated near-term earnings risk and limited upside potential from the current share 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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