Jefferies has reiterated its hold recommendation for Essity and has marginally lowered its target price to 252 kronor from the previous 253 kronor, according to a new analysis.
The research firm expects price pressure to persist into 2026, particularly in consumer tissue and baby care segments, where competition is intense and volumes remain weak.
At the same time, lower raw material and energy costs are providing some relief on the cost front, but this is expected to be partially offset by increased marketing investments, the report states.
Jefferies' estimate for organic growth in 2026 has been reduced to 0.9 percent from the previous 3.0 percent, which is below the consensus of 1.1 percent.
The stock is trading at a P/E ratio of around 13 based on 2027 consensus, which Jefferies says indicates that much of the risk related to weaker revenues and margins is already priced in.
Essity AB is one of the world's leading manufacturers of hygiene products. Net sales break down by family of products as follows:
- paper hygiene products (54.2%): paper towels, toilet paper, handkerchiefs, wipes, etc. sold under Tempo, Colhogar, Cozy, Cushelle, Danke, Delica, Demak Up, Favorita, Flen, Lotus, Lovly, Okay, Plenty, Regio and Zewa brands;
- professional hygiene products (25.9%): including toilet paper, handkerchiefs, hand lotions and hand soaps, hand sanitizers, as well as cleaning and wiping products;
- human care products (19.8%): incontinence products (Tena), feminine protection products (Libresse, Bodyform, Nana, Nuvenia, Saba, Nosotras, Donnasept, etc.), diapers (Libero, Up & Go, Libero-Peaudouce, Drypers, Pequenin, etc.), compresses and bandages;
- other (0.1%).
At the end of 2025, the group operated around 70 production sites in the world.
Net sales are distributed geographically as follows: Europe (61.1%), Latin America (17.4%), North America (16.2%), Asia (1.6%), and other (3.7%).
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