Update shared on08 Oct 2025
Fair value Decreased 1.02%Analysts have lowered their fair value target for Essity from SEK 285.25 to SEK 282.33. They cite concerns about structural pressures and a lack of near-term catalysts, even though there are some positive longer-term trends in higher margin segments.
Analyst Commentary
Recent Street research reveals a nuanced view of Essity, with diverging perspectives on its valuation, growth trajectory, and current risks. Analysts have outlined a range of bullish and bearish considerations as the company navigates sector and structural changes.
Bullish Takeaways- Some analysts recognize Essity's shift away from tissue products toward higher margin segments as a constructive long-term strategic move.
- The current share price is viewed by bullish analysts as reflecting a "trough" valuation, which could imply potential upside if execution improves.
- Positive longer-term trends, particularly in the beauty and wellness segments, are seen as supportive of future growth potential.
- Several analysts highlight structural and cyclical pressures that could limit profit growth and create headwinds for the sector.
- There is widespread concern about the lack of immediate catalysts to drive the stock price higher in the near term.
- Ongoing adaptation to what is described as a "new paradigm" for global manufacturers may challenge Essity’s ability to sustain or improve margins.
- Valuation resets and price target reductions reflect persistent uncertainty about the company's short-term outlook.
What's in the News
- Goldman Sachs analyst Aron Adamski initiated coverage of Essity with a Neutral rating and a SEK 275 price target. He noted that shares are trading at a "trough" valuation as the company transitions to higher margin segments but observed a lack of catalysts to move the stock higher (Periodicals).
- Essity completed the repurchase of 2,509,728 shares, representing 0.36% of shares outstanding, for SEK 682 million as part of its previously announced buyback program running from April 24, 2025 to June 30, 2025 (Key Developments).
Valuation Changes
- Consensus Analyst Price Target (Fair Value) has decreased slightly from SEK 285.25 to SEK 282.33.
- Discount Rate remains unchanged at 4.92%.
- Revenue Growth projections have edged lower, moving from 1.21% to 1.07%.
- Net Profit Margin has remained the same at 9.41%.
- Future P/E ratio has decreased somewhat from 15.65x to 15.57x.
Disclaimer
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