Essity (Hold, TP: SEK240.00) - Price-cost challenge not easing
While the Q4 raw material cost headwind was worse than expected, continued good execution on cost savings and positive temporary items balanced. Given the weak Consumer Staples universe and as Essity is trading at a premium to Kimberly Clark, we remain in neutral territory regarding the valuation and potential upside. Thus we reiterate our HOLD recommendation and have adjusted our target price to SEK240 (235) allowing for a move of the valuation base to 2019–2020e.
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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