Essity (Hold, TP: SEK290.00) - Strong mix and focus on price
Essity’s Q3 report showed price/mix strength in the tissue areas, something indicated also for Q4e, even though signs are gathering that the tissue price cycle is rolling over, probably challenging Essity’s price discipline into 2020. We have raised our EPS forecasts by 3–5% given favourable FX and the expectation that Essity will retain pricing discipline. We find the shares in neutral valuation territory and relative appeal, thus reiterate our HOLD but have lifted our target price to SEK290 (275) on our forecast increase.
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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