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Ebba Bjorklid
  • Ebba Bjorklid

Electrolux (Hold, TP: SEK92.00) - Uncertainty remains high

In Q4, we forecast similar demand and market dynamics to Q3, with consumer downtrading, elevated promotional activity, a negative mix, price pressure, and weak consumer demand weighing on sales and EBIT. We expect a sales decline of 1.6% YOY (organic growth of 2.6%) and an adj. EBIT margin of 3.2%. We reiterate our HOLD, but have cut our target price to SEK92 (94).

Electrolux AB: 1 director

A director at Electrolux AB bought 20,000 shares at 89.005SEK and the significance rating of the trade was 65/100. 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...

Ebba Bjorklid
  • Ebba Bjorklid

Electrolux (Hold, TP: SEK94.00) - North America under pressure

Following the Q3 results, we have less confidence in an earnings recovery in the North American businesses, with price pressure looking set to persist until more favourable tariffs are in place. We reiterate our HOLD, but have cut our target price to SEK94(102) on greater uncertainty about performance in North America.

Ebba Bjorklid
  • Ebba Bjorklid

Electrolux (Hold, TP: SEK100.00) - Step in the right direction

Following the Q2 results, we have greater confidence in the company getting its North American businesses under better control while continuing to benefit from a demand recovery in Latin America in H2 and into 2025. We reiterate our HOLD but have raised our target price to SEK100 (96).

Ebba Bjorklid
  • Ebba Bjorklid

Electrolux Minor model adjustments

We have updated our 2024 estimates, as we forecast stronger end-market headwinds in North America in Q2 than previously expected. The results are due at c08.00 CET on 19 July. Our 2024–2026 sales estimate changes are primarily due to FX movements. We do not consider these changes to be material, and we have not changed our HOLD recommendation. We have lowered our target price from SEK98 to SEK96.

Ebba Bjorklid
  • Ebba Bjorklid

Electrolux (Hold, TP: SEK98.00) - Next chapter

The outlook remains weak and we now expect Electrolux to be loss-making in 2024. However, CEO Jonas Samuelson’s resignation opens up for large-scale restructuring, which we deem necessary to move the EBIT margin closer to its ≥6% target and reduce the all-time high net debt. We have raised our sales and earnings estimates and cut our net debt assumptions after 2026, as we believe a new CEO could improve the sales, earnings and leverage trajectory over time. We have therefore upgraded to HOLD (SE...

Ebba Bjorklid
  • Ebba Bjorklid

Electrolux (Sell, TP: SEK80.00) - Weak Q1 expected

We forecast similar demand and market dynamics in Q1 to Q4, with consumer downtrading, elevated promotional activity, lower volumes YOY, negative mix effects and price pressure, and weak consumer demand weighing on sales and EBIT for the quarter. We expect -9% sales growth (-8% organic) and an adj. EBIT margin of -2.7%, down 360bp YOY. We reiterate our SELL and SEK80 target price.

Ebba Bjorklid
  • Ebba Bjorklid

Electrolux (Sell, TP: SEK80.00) - Situation remains tough

With tough underlying market conditions looking likely to continue, an increased risk of the asset-sale programme dragging out in time and achieving lower prices, and Electrolux missing its 2023 cost-saving target, we reiterate our SELL and have cut our target price to SEK80 (85).

Ebba Bjorklid
  • Ebba Bjorklid

Electrolux Minor model adjustments

We have updated our estimates, owing to minor adjustments to divisional sales and adj. EBIT in Q4 2023e (results due at c08:00 CET on 2 February). We do not consider these changes to be material, and we have not changed our SELL recommendation. We reiterate our SEK85 target price.

Ebba Bjorklid
  • Ebba Bjorklid

Electrolux (Sell, TP: SEK85.00) - The start to a tough 2024

Following the Q4 profit warning, we reiterate our SELL and have lowered our target price to SEK85 (90). We view the profit warning as further proof of how tough 2024 looks set to be for Electrolux, resulting especially from weak performance in North America and Europe, however it does not change our near-term outlook materially.

Ebba Bjorklid
  • Ebba Bjorklid

Electrolux (Sell, TP: SEK90.00) - Mounting headwinds in Q4

We expect consumer downtrading, elevated promotional activity, a less positive seasonality effect, and price pressure with weak consumer demand for discretionary categories to weigh on Q4 sales and EBIT. We reiterate our SELL but have raised our target price to SEK90 (85) based on the marginally more positive profitability outlook.

Ebba Bjorklid
  • Ebba Bjorklid

Electrolux (Sell, TP: SEK85.00) - Set for tough times ahead

Following the Q3 results and a change of analyst, we have downgraded Electrolux to SELL (HOLD) and cut our target price to SEK85 (135). We expect hampered performance on tougher market conditions and pressure on profitability and the balance sheet, and believe a near-term turnaround in North America looks challenging.

Christer Magnergård
  • Christer Magnergård

Electrolux (Hold, TP: SEK135.00) - Stay on the side-lines

The Q2 report was bleak. More worryingly, we expect weak earnings for the coming quarters too despite cost savings and easing raw material costs, due to price pressure, weak consumer spending, consumers shifting down, and weak residential construction activity hitting demand for high-margin products. We have cut our adj. EPS by 70% for 2023e and 15% for 2024e. We reiterate our HOLD but have cut our target price to SEK135 (160).

Christer Magnergård
  • Christer Magnergård

Electrolux (Hold, TP: SEK160.00) - Turning the page

The past year would probably not be described positively in the potential memoirs of Electrolux’s CEO. However, the worst should be behind us, and we expect the company to gradually improve in the coming quarters. Q2 should be a step in the right direction, with North America possibly becoming profitable again. However, weak consumer spending in many regions and intensified price promotions cast uncertainty over the speed of the potential turnaround. Thus, we reiterate our HOLD and SEK160 target...

Christer Magnergård
  • Christer Magnergård

Electrolux (Hold, TP: SEK160.00) - The patient is recovering

The Q1 results indicate that H2 2022 was the trough in earnings, and the company seems to be on track for a continued earnings recovery. However, as is the case with recuperating patients, this recovery is delicate and setbacks may arise. Intensified price promotion and persistent weak demand could result in considerable pressure on earnings, while the net debt reaches an all-time high in a less-favourable interest rate environment. We reiterate our HOLD, but have raised our target price to SEK1...

Mattias Holmberg
  • Mattias Holmberg

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.

Christer Magnergård ... (+19)
  • Christer Magnergård
  • Håkon Astrup
  • Joachim Gunell
  • Johannes Grunselius
  • Jørgen Lian
  • Karl-Johan Bonnevier
  • Martin Huseby Karlsen
  • Mattias Holmberg
  • Miika Ihamaki
  • Niclas Gehin
  • Nicolas McBeath
  • Ole Martin Westgaard
  • Ole-Andreas Krohn
  • Patrik Ling
  • Rune Majlund Dahl
  • Simen Aas
  • Simen Mortensen
  • Stefan Gauffin
  • Tomi Railo
Christer Magnergård
  • Christer Magnergård

Electrolux (Hold, TP: SEK140.00) - Significant estimate cuts

Although Electrolux had pre-announced its Q4 EBIT, it still managed to surprise the market by presenting a disappointing 2023 outlook. We now expect a loss for H1 before the earnings recovery should start. However, the risk of intensified promotional activity entering H2 is evident, which is why visibility into the expected earnings recovery is poor. We have cut our 2023e EPS by 72% and 2024e by 27%. We reiterate our HOLD but have cut our target price to SEK140 (160).

Christer Magnergård
  • Christer Magnergård

Electrolux (Hold, TP: SEK160.00) - Oops!...It did it again

We have downgraded Electrolux to HOLD (BUY) but we reiterate our SEK160 target price. While 2021 was the company’s best year in modern times, 2022e seems to have been the worst (since 1981). We believe it should scrap its dividend for 2022 on the back of weak performance in North America, a cloudy outlook for consumer discretionary spending, and sharply increased debt gearing levels. While earnings should improve in H2 2023, we see an elevated near-term earnings risk and limited upside potential...

Mattias Holmberg
  • Mattias Holmberg

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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