Essity (Hold, TP: SEK240.00) - Price-cost challenge still escalating
While the Q1 raw materials cost headwind was worse than expected and not yet offset by price rises, still good execution on cost savings and positive temporary items helped. Given the weak Consumer Staples universe, Essity trading at a 10% premium to Kimberly Clark, and management’s outlook of a worsening raw materials cost headwind and price increases in Q1 having their full effect in H2e, we remain neutral on the stock – we thus reiterate our HOLD and SEK240 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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