Electrolux Professional (Hold, TP: SEK73.00) - Capturing the potential...

Electrolux Professional’s investor day revealed the market recovery is continuing and the company is now able to shift its focus to executing its (unchanged) strategy. This follows some challenging years when the pandemic and spin-off from Electrolux have taken up much of management’s time and attention. We reiterate our HOLD and have lifted our target price to SEK73 (70).

Electrolux Professional (Hold, TP: SEK70.00) - River deep, mountain hi...

After a period with demand greatly affected by the pandemic, we believe Electrolux Professional could be back at 2019 sales level by Q3. We believe its strong post-Covid-19 ‘reopening case’ was cemented by management’s upbeat comments on the market recovery. However, this is reflected in our estimates, which are broadly unchanged, and at a 2022e EV/EBIT of 17x, we view the valuation as fair. We reiterate our HOLD but have lifted our target price to SEK70 (66), based on a blended 2022–2023e EV/EB...

Electrolux Professional (Hold, TP: SEK66.00) - No M&A for over two yea...

We have downgraded Electrolux Professional to HOLD (BUY). While we view it as a strong post-Covid-19 ‘reopening case’ and believe there could be further upside to consensus (we are 6–7% above on 2021–2023e adj. EBIT) – at a 2022e EV/EBIT of 16.5x, we view the valuation as fair. Should it manage to reignite M&A activity (last acquisition made in April 2019), we see potential for further multiples expansion, but visibility is low. We have raised our target price to SEK66 (63).

Electrolux Professional (Buy, TP: SEK63.00) - A strong ‘reopening’ cas...

We view Electrolux Professional as a strong post-Covid-19 ‘reopening case’, cemented by management’s upbeat comments with the Q1 results on signs of a recovery. We reiterate our BUY and have raised our target price to SEK63 (54) after lifting our 2021–2023e adj. EBIT by 3–4%. Our target price is now based on a 2022e EV/EBIT of 17x (previously 15x), falling to

Go West…

Sector profitability is set to be strong in 2021 but mounting supply chain constraints are an increasing concern. We favour US exposure (Assa Abloy, Hexpol, Dometic), mining equipment (Epiroc, Metso Outotec) and construction. We recently upgraded Alfa Laval and Hexpol (from HOLD to BUY) and downgraded Volvo and ABB (from BUY to HOLD).

Electrolux Professional (Buy, TP: SEK54.00) - Well placed for demand r...

We are 33% below consensus on Q1e adj. EBITA (albeit from a low base), with the deviation mainly relating to non-operating items, FX and a tough start to the year. However, we reiterate our BUY and have raised our target price to SEK54 (50) after lifting our 2022–2023e adj. EBITA by 3–5%. We believe the company will be a clear beneficiary of the roll-out of coronavirus vaccines, with a rapid recovery in demand in countries that have started to reopen, which we believe should result in the shares...

Northern Lights

Electrolux Professional (Buy, TP: SEK50.00) - Never gonna give you up

Electrolux Professional’s Q4 report was below our forecast and consensus. As we expected, the strength of Laundry had not been understood by the market but this was more than offset by very weak Food & Beverage – affected by lower cost-savings in addition to lower volumes. We have cut our adj. EBIT for 2021e by 16% and 2022e by 4%, as we now expect a somewhat slower recovery. We reiterate our BUY and SEK50 target price.

Green is good

Average alignment with the EU Taxonomy that defines ‘sustainable activities’ could be as low as 11% for the sector. Hexagon, ABB and Alfa Laval screen best, while ‘strong’ ESG cases like Nibe and Beijer Ref’s alignments are surprisingly low. We also see a mismatch between companies’ taxonomy alignment and ESG funds’ positioning, which could have a major impact on flows in certain stocks. For 2021, our top sector picks are Autoliv, Dometic, Epiroc, Metso Outotec, Hexagon and SKF, as we favour aut...

Northern Lights

Electrolux Professional (Buy, TP: SEK50.00) - Quality warrants re-rati...

Despite an expected demand hit from increased lockdowns in Q4e, we are 10% above consensus on adj. EBITA as we believe positive mix effects are underestimated. We reiterate our BUY and have raised our target price to SEK50 (41) as the company’s current discount valuation appears undeserved given its solid performance through the Covid-19 pandemic and further recovery potential. Our target price is based on a 2022e EV/EBIT of 14x (previously 12x), still a >5% discount to Middleby’s and Welbilt’s ...

Northern Lights

Electrolux Professional (Buy, TP: SEK41.00) - No dirty laundry

Although uncertainty remains as some regions go back into lockdown, the Q3 report showed strength. September and October sales have improved from previous months. The order book was roughly flat YOY at end-Q3, and the significant customer destocking in US Laundry during Q2–Q3 has now ended. After minor estimate revisions, we are 10–16% above consensus 2021–2022e adj. EBIT. We reiterate our BUY and have raised our target price to SEK41 (40), reflecting a 2022e EV/EBIT of 11x (a 30% discount to Mi...

Northern Lights

The new normal

Nordic Capital Goods (, ) - (69 pages)

Electrolux Professional (Buy, TP: SEK40.00) - Set for solid earnings b...

We are 25% above consensus on adj. EBITA for Q3e (results due on 30 October) as we expect a continued recovery with support from: 1) the end-Q2 order book being up YOY; 2) Food & Beverage (F&B) seeing a continued positive earnings trend, where EBITA was back in the black in June after the losses in April–May; and 3) some deliveries being delayed from H1 to H2. We reiterate our BUY and SEK40 target price with broadly unchanged estimates. Our target price is based on a 2022e EV/EBIT of 11x, a 30% ...

Northern Lights

Electrolux Professional (Buy, TP: SEK40.00) - Recovering faster than e...

The recovery seems to be materialising faster than we expected, with the end-Q2 order book up YOY, and Food & Beverage (F&B) EBITA back in the black in June after the losses in April–May. We reiterate our BUY and have raised our target price to SEK40 (37) after lifting our 2020e adj. EBITA by 22% (from a low base; 2021–2022e are broadly unchanged). Our target price is based on a 2022e EV/EBIT of 11x (previously 10x), a 30% discount to Middleby’s and Welbilt’s 5-year averages.

Northern Lights

Electrolux Professional (Buy, TP: SEK37.00) - Estimates cut but target...

We have cut our 2020e EBIT significantly and 2021–2022e EBIT by 7–8% (due to Q2e and FX). However, we reiterate our BUY and have raised our target price to SEK37 (32), having rolled our valuation base over from 2021e to 2022e and peers have re-rated. Our new target price is based on a 2022e EV/EBIT of 10x (previously 9.5x on 2021e), still corresponding to a 35% discount to the Middleby and Welbilt 5-year average.