Hold Rating on Huhtamaki Oyj Amid Delayed Sales Recovery and Uncertain Consumer Spending

Huhtamaki Oyj (0K9W – Research Report), the Consumer Defensive sector company, was revisited by a Wall Street analyst today. Analyst Cole Hathorn from Jefferies downgraded the rating on the stock to a Hold and gave it a €35.00 price target.

Cole Hathorn’s rating is based on a combination of factors impacting Huhtamaki Oyj’s performance. Despite the company’s valuation appearing attractive compared to historical averages, the anticipated recovery in sales volumes has been delayed, which is crucial for enhancing operating leverage and improving earnings. The uncertainty in consumer spending, particularly in the foodservice sector, adds to the challenges, pushing the recovery further into the future.
Huhtamaki’s North American division, a significant contributor to its earnings, has shown strong performance, but recent data indicates a slowdown in retail tableware sales. This slowdown, coupled with muted sales data from Nielsen, suggests potential risks to the company’s earnings outlook. Hathorn also highlights the downside risks to the 2025 earnings consensus, driven by demand and volume uncertainties rather than raw material costs. These factors collectively lead to a Hold rating, reflecting the need for visible volume recovery and improved confidence in the company’s operating leverage and return on capital employed.