Husqvarna (Sell, TP: SEK82.00) - Everything everywhere all at once
We have downgraded Husqvarna to SELL (HOLD) and have cut our target price to SEK82 (86). We see a poor earnings outlook after Q1 as 1) we expect soft demand for robotic lawnmowers, which is a truly discretionary product; 2) the consumer weakness that has hit many other companies should be more evident for Husqvarna in the coming quarters; and 3) all-time high inventories will need to be reduced, which should lead to fixed-cost under-absorption.Husqvarna AB produces outdoor power products. Products include: robotic lawn mowers, chainsaws, handheld petrol-powered products such as clearing saws and trimmers, garden tractors, and lawn mowers. Co. is also engaged in providing consumer watering products, cutting equipment and diamond tools for the construction and stone industries. Co.'s products and solutions are sold via dealers and retailers. Co. has three business areas: Europe & Asia/Pacific and Americas, which provide forest, park and garden products to dealers and retailers in Europe and Asia/Pacific, and in North and Latin America, respectively; and Construction, which provides light construction products and diamond tools.
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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