Electrolux Professional (OM:EPRO B): Evaluating the Valuation After Strategic Moves in Sustainability and Production

Electrolux Professional (OM:EPRO B) is making moves that could shape the company's future, announcing a partnership with Mimbly to drive microplastic filtration technology, a shift in its production footprint, and a slate of new sustainable products.

See our latest analysis for Electrolux Professional.

Momentum has been picking up for Electrolux Professional, with recent moves into sustainability partnerships, product launches, and a major production shift helping to support a modest 3.4% 1-month share price return. While the total shareholder return over the past year is down 4.7%, long-term investors have seen gains of over 63% across three years. This highlights the potential benefits of staying the course as the company navigates strategic change.

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Despite this wave of innovation and a healthy discount to analyst price targets, investors are left to ponder whether recent strategic moves are fully reflected in the share price or if a genuine buying opportunity remains.

Most Popular Narrative: 11.7% Undervalued

Compared to Electrolux Professional's last close price, the narrative consensus points to a fair value that is notably higher. This has sparked debate over whether recent innovations are fully reflected by the market. This fair value estimate is based on forward-looking expectations for revenue growth, improved profit margins, and operational efficiencies in the years ahead.

Substantial investment in R&D (now approximately 5% of sales, up from roughly 3% three years ago) and the imminent rollout of new, higher-value, energy-efficient, and connected products is expected to expand gross margins and net earnings, aligning with heightened customer focus on sustainability and efficiency.

Read the complete narrative.

Want to know which bold financial forecasts justify a higher target price? The roadmap is a mix of aggressive profit margin expansion and ambitious top-line growth projections. See which assumptions power this valuation and discover the surprising bets that shape the narrative's future outlook.

Result: Fair Value of $75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent currency headwinds and rising operational costs could challenge profit margins and jeopardize the optimistic outlook for Electrolux Professional's growth.

Find out about the key risks to this Electrolux Professional narrative.

Another View: Is the Discount Really That Big?

While the analyst consensus sees Electrolux Professional as undervalued, our SWS DCF model suggests its fair value could be even higher, at SEK108.96. This is significantly above the current market price and points to a much deeper undervaluation than basic ratios may reveal. Which valuation approach reflects reality, and could the opportunity be even greater than it first appears?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Electrolux Professional Narrative

If you have a different perspective or want to dive deeper into the numbers, shape your own Electrolux Professional story in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Electrolux Professional.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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