Essity (Buy, TP: SEK340.00) - Currency headwinds overshadow strong underlying sales trend

Q4 adj. EBITA was 4% below consensus, largely explained by FX weighing on the gross margin, since organic sales growth was in line. In addition, cost pressure has continued in 2025, with Essity guiding for higher capex, marketing and digital investments, as well as FX and currency headwinds. We continue to like the valuation and reiterate our BUY, but have cut our target price to SEK340 (350), mainly on our lower estimates.

Behind the curve, again

The weekly navigator

From the past week, we highlight: 1) we increased our target price for Investor to SEK345 following its Q4 report; 2) VEF reported Q4 NAV down 26% QOQ; 3) Flerie reported NAV down 1.5% QOQ; 4) we hosted an investor lunch with VNV Global; 5) Latour announced its new CFO; and 6) Creades raised its valuation of Klarna.

Investor (Buy, TP: SEK345.00) - Set for continued outperformance

2024 was yet another strong year for Investor, with 20% NAV growth YOY (SIXRX at 9%), Patricia Industries being the highlight at a c30% return. We see scope for continued solid progress across the portfolio, and note the higher exit activity in EQT, laying the foundations for an uptick in cash flow to Investor. We reiterate our BUY and have raised our target price to SEK345 (330), reflecting 7% 12-month forward NAV growth and an incrementally positive view on the listed portfolio (stocks accounting for 22% of NAV recently upgraded to BUYs).

Borregaard (Buy, TP: NOK230.00) - Compounder priced as chemicals

We estimate Q4 EBITDA of NOK356m, implying a small YOY increase, as issues with the maintenance stop in 2023 are not fully offset by higher wood costs this year. We believe valuation is attractive for this compounder, as the stock has pulled back likely due to weak sentiment in European chemicals, which should not affect the company. We estimate 53% EPS growth from 2024 to 2026, driven primarily by strong FX tailwinds. We reiterate our BUY and target price of NOK230.