Electrolux Professional (Hold, TP: SEK79.00) - Improving performance

Following the Q3 results, we have greater confidence in the company’s organic growth trends in Laundry and the US Food & Beverage segment (on growing sales to chains and institutional customer demand looking set to improve). This should support higher than previously estimated margin improvement. We reiterate our HOLD, but have raised our target price to SEK79 (71).

Electrolux Professional (Hold, TP: SEK71.00) - Mixed conditions, but o...

In Q3, we expect largely similar market and divisional dynamics as in Q2, but positive organic growth for the US Food & Beverage segment now looks more likely on growing chains and institutional customer demand looking set to improve. We forecast group Q3 sales growth of 4.4% YOY and an adj. EBITA margin of 11.7%, and reiterate our HOLD with a reduced target price of SEK71 (73) due to increased FX headwinds and lower 2024–2025e Tosei sales.

Electrolux Professional (Hold, TP: SEK73.00) - Improving profitability

After the Q2 results, we have slightly greater confidence in the company’s profitability delivery near-term due to higher organic growth estimates in Laundry, better mix in Food & Beverage and lower materials costs. Following a change of analyst, we reiterate our HOLD, but have raised our target price to SEK73 (72).

Electrolux Professional (Hold, TP: SEK72.00) - Food delivery

While our 2024–2026e sales are roughly unchanged, we have raised our clean EBITA by 4–2% on higher margin assumptions for Food & Beverage. Tosei was accretive for group margins in Q1, but the quarter is seasonally strong for the acquired business, and we do not expect Q2 to be as solid. We reiterate our HOLD, but have increased our target price to SEK72 (71).

Electrolux Professional (Hold, TP: SEK71.00) - Inventory step-up to we...

We have raised our 2025–2026e adj. EBITA by 3–5%, mainly on positive FX revisions and higher margin assumptions. We have included an inventory step-up in our Q1 estimates, which hits our adj. EBITA negatively by SEK30m. We reiterate our HOLD but have raised our target price to SEK71 (62) on valuation.

Electrolux Professional (Hold, TP: SEK62.00) - Signs of improvement in...

We have raised our 2024–2025e sales by 3% and adj. EBITA by 1–3%. Postponed orders in the US continued to weigh on Food & Beverage sales, but the company seems confident this will improve going forward, which we find positive as the timeline for a potential recovery has been uncertain. We reiterate our HOLD but have increased our target price to SEK62 (55).

Electrolux Professional (Hold, TP: SEK55.00) - Tosei held back by FX

While we expect the Tosei acquisition to add c10% to annual group EBITA, we have raised our 2024–2025e adj. EBITA by only 6% due to the negative effect of FX. We believe the weak US market continued to weigh on Food & Beverage sales in Q4, but do not expect this market to have worsened QOQ. In our view, demand within Laundry was solid in Q4, although Q4 2022 is a tough comparable for the segment. We reiterate our HOLD but have raised our target price to SEK55 (48).

Electrolux Professional (Hold, TP: SEK59.00) - Business as usual

We have slightly raised our 2023e sales and adj. EBITA by 1%, on the back of FX, ahead of the Q3 results due at 08:00 CET on 27 October. We expect still-robust demand in Laundry in Q3 and solid overall demand in Food & Beverage, despite somewhat weaker demand in the US in the quarter. We reiterate our HOLD, but have lowered our target price to SEK59 (65) on valuation.

Electrolux Professional (Hold, TP: SEK65.00) - Laundry clean sweep

We have raised our 2023e sales and adj. EBITA by 1% and 3%, respectively. The Laundry division showed strength in Q2, with c28% organic sales growth YOY. Food & Beverage (F&B) order intake remained healthy, and despite being somewhat soft in Q2 due to de-stocking, the US F&B market saw a recovery at the end of the quarter, which has continued into July. We reiterate our HOLD but have raised our target price to SEK65 (63).

Northern Lights

Electrolux Professional (Hold, TP: SEK63.00) - Set for a solid Q2e

We have raised our 2023e sales and adj. EBITA by c2% each, primarily on FX. While we believe demand has held up across all markets, the destocking in Food & Beverage in the US from Q1 seems to have continued in Q2. Moreover, we do not believe the company has seen any price pressure yet, and its previous price increases should offset high inflationary pressure. We reiterate our HOLD but have raised our target price to SEK63 (60).

Electrolux Professional (Hold, TP: SEK60.00) - Still heat in the oven

We have raised our 2023e sales by 3% and adj. EBITA by 8% on the back of the strong Q1 report. Order intake within Food & Beverage was robust, although it softened towards the end of the quarter. Organic growth in Laundry was strong at 19.6% YOY, driven by price and increased volumes. On the downside, Food & Beverage in the US was weak due to customers having high inventory levels. We reiterate our HOLD, but have increased our target price to SEK60 (55).

Northern Lights

Still going strong

Although reported EU taxonomy alignment for the sector is low, we have identified which companies screen best and could benefit from attracting ESG capital. We still favour China, mining, energy and aftermarket exposure, and see upside potential to consensus estimates, but view overall risk/reward as neutral on elevated valuation.

Electrolux Professional (Hold, TP: SEK55.00) - On course for solid Q1

We have increased our 2023e sales and adj. EBIT by 2% and 4%, respectively, as demand seems to be holding up better than we previously expected. For Q1, we believe de-stocking by distributors in the US could have a slightly negative impact on Food & Beverage margins. We are roughly in line with consensus on Q1e sales and adj. EBIT, but we believe consensus 2023e EPS could come down slightly on higher net financial items assumptions. We reiterate our HOLD but have raised our target price to SEK55...

Electrolux Professional (Hold, TP: SEK50.00) - Still-solid demand

We have raised our 2023e sales by 2% as demand seems to be holding up, and have thus increased our adj. EBITA by 3%. Q4 EBITA appears to have been negatively affected by extraordinary group common costs, but was still c1–2% below consensus, adjusted for this. Demand, particularly within Laundry, seems to have remained solid, except for Food & Beverage in Europe. We reiterate our HOLD and SEK50 target price.

Northern Lights

Electrolux Professional (Hold, TP: SEK50.00) - Still some issues in th...

Supply-chain issues in Food & Beverage in the US seem to have continued in Q4, and we believe consensus on group underlying Q4 adj. EBITA could come down by c2–3% as a result. However, overall demand seems to have remained solid, apart from some signs of weakness in Food & Beverage in Europe, although in our view this should be reflected in consensus. We reiterate our HOLD, but have raised our target price to SEK50 (47).

Industrial blues

DNB Markets’ Strategy and Macro team suggests being underweight industrials, due to the sector’s premium valuation and risk of >10% earnings cuts in 2023 from a cyclical slowdown. Our sensitivity analysis shows Volvo, Dometic and Autoliv have the greatest downside risk to earnings in a cyclical slowdown, while Assa Abloy and Hexagon (two of our sector top picks) should be most resilient. We prefer mining, energy, aftermarket and China exposure.

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