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Essity AB: 1 director

A director at Essity AB bought 8,200 shares at 246.000SEK and the significance rating of the trade was 78/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly sho...

Simen Aas
  • Simen Aas

Essity (Buy, TP: SEK325.00) - Gross margin recovery story intact

Q4 marked a weak end to 2023, with SG&A costs and muted tissue organic growth overshadowing a continued gross margin recovery. However, we still like Essity’s earnings momentum, upcoming capital distributions and proposed 2023 DPS of SEK7.75 (total yield of c15%), and reiterate our BUY and SEK325 target price.

Simen Aas
  • Simen Aas

Essity (Buy, TP: SEK325.00) - Soft ending to the year

We consider this a weak report for Essity, with Q4 adj. EBITA 6% below consensus as strong gross margins were offset by weak organic growth and higher than expected SG&A. That said, ROCE was 16.4% in 2023, up c550bp YOY. The Vinda transaction is expected to close in mid-2024. We expect consensus 2024e adj. EBITA to come down 4–6% following the report and expect a negative share price reaction.

Simen Aas
  • Simen Aas

Essity (Buy, TP: SEK325.00) - A balanced portfolio in the making

Following the proposed divestment of Vinda, we believe Essity’s portfolio will have structurally higher ROCE, higher margins and lower earnings volatility as well has higher structural market growth, which should lead Essity to screen better than previously against its US peers. We reiterate our BUY and SEK325 target price as we still find the valuation and earnings momentum attractive.

Simen Aas
  • Simen Aas

Essity (Buy, TP: SEK325.00) - Profitability and volumes improving

The Q3 results were better than expected as volumes and margins were above consensus. We still like the positive earnings momentum (+78% YOY growth in adj. EBIT in Q3) and strong cash flow profile in the coming quarters. We reiterate our BUY and have raised our target price to SEK325 (310) on higher estimates.

Simen Aas
  • Simen Aas

Essity (Buy, TP: SEK310.00) - Q3 adj. EBITA above consensus

We consider this a positive report for Essity, including Q3 adj. EBITA c8% above consensus. The company said the strategic review of Vinda and Consumer Tissue Private Label in Europe was going according to plan. We expect c2–3% positive revisions to consensus 2023e adj. EBITA on the back of the report and expect a positive share price reaction.

Simen Aas
  • Simen Aas

Essity (Buy, TP: SEK310.00) - Near-term pain, long-term gain

We are cautious ahead of the Q3 report, with our adj. EBITA c13% below consensus on lower organic sales growth YOY, due to downtrading hitting consumer tissue and baby care. We have lowered our target price to SEK310 (315), but reiterate our BUY, with the stock trading at a c25% discount to historical multiples on our 2023–2024e adj. EBITA, c7–4% below consensus.

Douglas Lindahl ... (+14)
  • Douglas Lindahl
  • Hanna Lindbo
  • Jesper Ingildsen
  • Joachim Gunell
  • Johan Skoglund
  • Johannes Grunselius
  • Martin Arnell
  • Mattias Holmberg
  • Ole Martin Westgaard
  • Ole-Andreas Krohn
  • Simen Aas
  • Simen Mortensen
  • Stefan Gauffin
  • Tomi Railo
Simen Aas
  • Simen Aas

Essity (Buy, TP: SEK315.00) - Value beyond 2023e

Essity reported weak Q2 results, with organic growth and margins below our expectations. It guided for lower volumes YOY in 2023 (previously flat to up) and H2 looks set for campaign activity. We have cut our target price to SEK315 (330), but reiterate our BUY, as we still like the earnings momentum (Q2 adj. EBITA +c50% YOY). At our target price and on our estimates (2023e adj. EBITA 10% below pre-Q2 consensus), the stock would be trading at a 2023–2024e adj. P/E of c19–17x, in line with its his...

Simen Aas
  • Simen Aas

Essity (Buy, TP: SEK330.00) - Q2 miss

We consider this a weak report for Essity, including Q2 results below consensus and reiterated guidance. The strategic review is going according to plan. We expect consensus 2023e adj. EBITA to come down 1–2% on the back of the report and believe a negative share price reaction is warranted.

Johannes Grunselius ... (+5)
  • Johannes Grunselius
  • Miika Ihamaki
  • Ole Martin Westgaard
  • Ole-Andreas Krohn
  • Simen Aas
Simen Aas
  • Simen Aas

Essity (Buy, TP: SEK330.00) - Price (stickiness) on the agenda

Following the steady decline in input costs, investor focus in Essity has shifted from its ability to raise prices to maintaining them. We expect this along with volume growth, its ongoing strategic review and the gross profit margin recovery to be in focus in its Q2 report. We reiterate our BUY and SEK330 target price.

Aurore Tigerschiöld ... (+24)
  • Aurore Tigerschiöld
  • Douglas Lindahl
  • Emil Jonsson
  • Frank Maaø
  • Geir Hiller Holom
  • Håkon Astrup
  • Helene Kvilhaug Brøndbo
  • Jacob Berg Nielsen
  • Jesper Ingildsen
  • Johannes Grunselius
  • Karl-Johan Bonnevier
  • Martin Hoang Nguyen
  • Martin Huseby Karlsen
  • Mattias Holmberg
  • Niclas Gehin
  • Nicolas McBeath
  • Niklas Wetterling
  • Ole Martin Westgaard
  • Ole-Andreas Krohn
  • Patrik Ling
  • Simen Aas
  • Stefan Gauffin
  • Steffen Evjen
  • Tomi Railo
Simen Aas
  • Simen Aas

Essity (Buy, TP: SEK330.00) - Clawing back margins

Q1 adj. EBITA was 10% above consensus, as gross margins improved YOY; Essity also demonstrated its ability to raise prices despite input costs passing the peak. We reiterate our BUY and have raised our target price to SEK330 (325) on higher estimates.

Simen Aas
  • Simen Aas

Essity (Buy, TP: SEK325.00) - Strong Q1 report

We consider this a positive report, with adj. EBITA 10% above consensus, driven by strong organic growth and better gross margins. We expect consensus 2023–2024e adj. EBITA to rise 2–3% on the back of the report and believe a positive share price reaction is warranted.

Douglas Lindahl ... (+18)
  • Douglas Lindahl
  • Emilie Krutnes Engen
  • Håkon Astrup
  • Hanna Lindbo
  • Joachim Gunell
  • Johan Skoglund
  • Johannes Grunselius
  • Karl-Johan Bonnevier
  • Mattias Holmberg
  • Nicolas McBeath
  • Niklas Wetterling
  • Ole Martin Westgaard
  • Ole-Andreas Krohn
  • Patrik Ling
  • Rune Majlund Dahl
  • Simen Aas
  • Simen Mortensen
  • Tomi Railo
Ole Martin Westgaard ... (+3)
  • Ole Martin Westgaard
  • Ole-Andreas Krohn
  • Simen Aas
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