Essity (OM:ESSITY B) Valuation in Focus After Major Q3 Restructuring and Strategic Overhaul

Essity (OM:ESSITY B) unveiled a sweeping business reorganization and updated investors with third-quarter results on the same day, signaling dramatic changes designed to boost profitable growth and streamline operations over the next year.

See our latest analysis for Essity.

Essity’s shakeup comes after a challenging year for shareholders, with the latest share price at SEK 260.9 and a year-to-date price return of -12.2%. Still, recent momentum is building as the share price has climbed over 8% in the last 90 days. This suggests the market is responding to strategic changes and long-term transformation. Even after a tough 12 months, the three- and five-year total shareholder returns of 22.9% and 13.5% show the bigger picture remains encouraging for long-term holders.

If Essity’s new approach has you wondering what else is gaining traction, this is a perfect moment to broaden your scope and discover fast growing stocks with high insider ownership

With restructuring underway and shares recently rebounding, the key question is whether Essity is now undervalued and primed for a turnaround, or if the current price already reflects future growth potential.

Most Popular Narrative: 7.2% Undervalued

With Essity’s fair value in the narrative set at SEK 281.08, the last close price of SEK 260.9 suggests analysts see notable upside at today’s level, driven by their assumptions about future profitability and growth.

Innovations in premium, eco-friendly, and coreless products, along with industry recognition for sustainability, position Essity to capitalize on shifting consumer preference for sustainable and higher-value tissue and hygiene products. This supports both topline growth and margin expansion.

Read the complete narrative.

Want to know precisely what’s fueling this valuation call? The engine behind the analysts’ numbers combines an earnings growth path and a projected profit margin most investors wouldn’t expect in this industry. There is a bold set of financial predictions lurking behind this fair value. Tap in to see what could send expectations soaring.

Result: Fair Value of SEK 281.08 (UNDERVALUED)

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

However, ongoing weak volume growth in key segments and rising costs could threaten Essity’s projected margins and challenge the optimism that underpins these valuations.

Find out about the key risks to this Essity narrative.

Build Your Own Essity Narrative

If you see things differently, or want to draw your own conclusions, you can quickly create a personalized view on Essity using our tools in under three minutes. Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Essity.

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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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