Essity (Hold, TP: SEK300.00) - Balancing the pulp price challenge
With pulp prices hitting new highs, Essity faces the continued challenge of raw material headwinds, requiring further pricing initiatives to be fully balanced, which is likely to take until H1 2022 in our view. Our Q2 forecasts are below consensus, while our revised EPS forecasts for 2021–2023 are more in line, still suggesting an historically good performance at a high level. We still find Essity to be in neutral absolute and relative valuation territory, and consumer staples underperforming the market, reiterating our HOLD and SEK300 target price.
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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