Huhtamaki - Initiation of coverage - Packing a punch
We initiate coverage on Huhtamaki with a BUY and EUR47 target price. We like the Finnish packaging specialist for its attractive exposure to several structural growth drivers, and diversified, flexible business model. We are 4–8% above consensus on 2025–2026e clean EBIT, and believe the market is overlooking cost benefits in the short term, and a material step-up opportunity in Flexible Packaging. We find a NTM EV/EBIT of c12.5x (5-year average: c15.0x) attractive and a good entry point.Huhtamaki is engaged in the packaging for food and drink. Co. and its subsidiaries have the following four segments: Foodservice Europe-Asia-Oceania, which provides single and double wall paper cups, paper and plastic plates and bowls, plastic cups, cutlery, and food-to-go packaging; North America, which serves local markets in North America with Chinet® disposable tableware products, foodservice packaging products, as well as ice cream containers and other consumer goods packaging products; Flexible Packaging, which produces packaging and labels; and Molded Fiber, which uses recycled fiber to make egg cartons and trays, fruit trays and cup carriers, as well as other protective packaging.
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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