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Essity Aktiebolag (SE:ESSITY.A)
:ESSITY.A
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Essity Aktiebolag
(ESSITY.A)
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Rating:72Outperform
Price Target:
kr292.00
▲(10.40% Upside)
Essity Aktiebolag's overall stock score reflects a solid financial foundation and positive earnings call sentiment, highlighting strong profit margins and strategic growth initiatives. However, technical analysis indicates potential overbought conditions, and challenges in revenue growth and cash flow efficiency remain. The stock's valuation is reasonable, with an attractive dividend yield.
Essity Aktiebolag (ESSITY.A) vs. iShares MSCI Sweden ETF (EWD)
Market Cap
kr180.18B
Dividend Yield3.09%
Average Volume (3M)25.39K
Price to Earnings (P/E)14.6
Beta (1Y)0.19
Revenue Growth-1.91%
EPS Growth-40.37%
CountrySE
Employees36,000
SectorConsumer Defensive
Sector Strength42
IndustryHousehold & Personal Products
Share Statistics
EPS (TTM)4.86
Shares Outstanding58,473,656
10 Day Avg. Volume13,063
30 Day Avg. Volume25,387
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)2.34
Price to Sales (P/S)1.42
P/FCF Ratio22.02
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
kr235.00Price Target Upside-11.15% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Essity Aktiebolag Business Overview & Revenue Model
Company DescriptionEssity Aktiebolag (ESSITY.A) is a global hygiene and health company headquartered in Sweden, specializing in the production of personal care products, tissue paper, and medical solutions. The company operates in two main segments: Consumer and Professional. Its core product offerings include incontinence products, feminine care items, baby care products, and a variety of tissue products for consumers and businesses. Essity emphasizes sustainability and innovation, striving to improve well-being through its product development and practices.
How the Company Makes MoneyEssity generates revenue through the sale of its diverse range of hygiene and health products across multiple channels, including retail, e-commerce, and direct sales to businesses. The company's revenue model is primarily based on product sales, with key revenue streams coming from its Consumer segment (which includes personal care and tissue products) and Professional segment (which includes medical and hygiene products for healthcare facilities). Essity's strong brand portfolio, which includes well-known names like TENA, Libero, and Tempo, supports its market presence and pricing power. Additionally, strategic partnerships with retailers and distributors enhance its distribution capabilities, while a focus on sustainability and innovation attracts environmentally conscious consumers, further contributing to its earnings.
Essity Aktiebolag Earnings Call Summary
Earnings Call Date:Oct 23, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Jan 22, 2026
Earnings Call Sentiment Neutral
Essity's Q3 2025 call highlighted consistent organic sales growth, record profit margins, and strong cash flow, bolstered by innovative product launches and strategic reorganization. However, challenges persist with declines in Consumer Tissue and baby segments, and ongoing price competition. The sentiment is balanced with a focus on future growth and efficiency improvements.Q3-2025 Updates
Positive Updates
Consistent Organic Sales Growth
Essity reported a 0.9% organic sales growth in Q3 2025, marking continued positive performance across all three business areas.
Record High Profit Margins
The company achieved record high gross profit margins and ended the quarter with a profit margin of 14.6%.
Strong Cash Flow
The company generated a strong cash flow and delivered a profit above SEK 5 billion.
Innovations in Medical Solutions
Essity launched new products such as Actimove Manus Air and TENA Pro skin stretch day and night, addressing unmet needs and contributing to growth in the Medical Solutions business.
Growth in Incontinence Care
Incontinence sales in U.S. retail grew by 21%, with strong underlying growth compensating for challenges in certain markets.
Reorganization and Cost-Saving Initiatives
Essity announced a reorganization into four global business units and a cost-saving program expected to generate savings of SEK 1 billion by the end of 2026.
Negative Updates
Decline in Consumer Tissue and Baby Segments
Consumer Tissue and baby segments experienced a decline, with branded sales suffering from weaker consumer sentiment and increased price competitiveness.
Challenging Market Conditions
Essity continues to face challenging market conditions, particularly in Consumer Tissue and Professional Hygiene, with high price competition affecting performance.
Impact of U.S. Tariffs
Essity incurred SEK 110 million in costs related to U.S. tariffs in Q3, with an expected reduction to SEK 70 million in Q4.
Company Guidance
During the call, Essity provided guidance on several key financial metrics. The company reported a 0.9% organic sales growth in Q3 of 2025, with price being the most significant contributor to this increase. Essity achieved a profit margin of 14.6% and a profit exceeding SEK 5 billion, supported by record-high gross profit margins. The strong performance in Q3 was attributed to effective cost management, notably in SG&A, and the successful execution of initiatives aimed at accelerating profitable growth. Essity also highlighted a SEK 1 billion cost-saving program expected to be fully realized by the end of 2026, which will primarily target SG&A expenses. The company plans to reinvest these savings into growth initiatives, particularly in higher-yielding areas, while maintaining or increasing investments in A&P and R&D to drive future volume growth and improve margins through operating leverage. Essity's financial targets remain at more than 3% organic sales growth and an EBIT margin exceeding 15%, indicating a strategic focus on balancing cost savings with reinvestment for sustainable long-term growth.Essity Aktiebolag Financial Statement Overview
Summary
Essity Aktiebolag demonstrates a solid financial foundation with stable margins and effective debt management. However, the company faces challenges in revenue growth and cash flow efficiency. Strategic initiatives to enhance sales and optimize cash flow could bolster financial performance. The balance sheet remains strong, supporting future growth opportunities.Income Statement
Essity Aktiebolag's income statement shows a mixed performance. The company has maintained a healthy gross profit margin of around 32-33% over the years, indicating efficient cost management. However, the net profit margin has seen a decline in the TTM period to 8.58% from 14.35% in 2024, reflecting potential challenges in maintaining profitability. Revenue growth has been negative in recent periods, with a TTM decline of 1.67%, suggesting a need for strategic initiatives to boost sales. Despite these challenges, the EBIT and EBITDA margins remain stable, showcasing operational efficiency.75
Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio improving to 0.51 in the TTM period from 0.86 in 2023, indicating effective debt management. The return on equity (ROE) is strong at 14.82% in the TTM period, although it has decreased from 23.65% in 2024, suggesting a decline in profitability relative to shareholder equity. The equity ratio is not explicitly mentioned, but the overall leverage appears manageable, with a focus on maintaining equity levels.70
Positive
Cash Flow
Cash flow analysis shows a decline in free cash flow growth by 10.86% in the TTM period, indicating potential cash management challenges. The operating cash flow to net income ratio is at 0.40, suggesting that the company generates sufficient cash from operations relative to its net income. However, the free cash flow to net income ratio has decreased to 0.53 from 0.56 in 2024, highlighting a need for improved cash flow efficiency.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 143.24B | 145.55B | 147.15B | 156.17B | 121.87B | 121.75B |
| Gross Profit | 46.78B | 47.13B | 45.13B | 37.23B | 35.09B | 39.44B |
| EBITDA | 25.69B | 26.14B | 20.90B | 15.44B | 20.45B | 24.89B |
| Net Income | 12.29B | 20.89B | 9.55B | 5.57B | 8.62B | 10.23B |
Balance Sheet | ||||||
| Total Assets | 167.41B | 185.28B | 202.99B | 210.60B | 175.05B | 154.65B |
| Cash, Cash Equivalents and Short-Term Investments | 6.70B | 15.62B | 5.19B | 4.50B | 4.09B | 5.15B |
| Total Debt | 41.34B | 43.78B | 60.98B | 71.52B | 56.83B | 45.88B |
| Total Liabilities | 86.21B | 96.54B | 123.59B | 134.04B | 106.54B | 91.30B |
| Stockholders Equity | 80.80B | 88.31B | 70.85B | 67.35B | 59.87B | 54.35B |
Cash Flow | ||||||
| Free Cash Flow | 7.91B | 9.40B | 14.68B | 5.92B | 7.31B | 11.21B |
| Operating Cash Flow | 15.04B | 16.80B | 21.57B | 12.87B | 14.67B | 17.82B |
| Investing Cash Flow | -5.26B | 9.41B | -7.11B | -14.50B | -12.13B | -7.09B |
| Financing Cash Flow | -16.10B | -22.34B | -11.55B | 1.81B | -3.81B | -8.38B |
Essity Aktiebolag Technical Analysis
Positive
264.50
Price Trends
253.98
Positive
253.51
Positive
266.11
Negative
Market Momentum
3.06
Positive
61.52
Neutral
69.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:ESSITY.A, the sentiment is Positive. The current price of 264.5 is above the 20-day moving average (MA) of 262.40, above the 50-day MA of 253.98, and below the 200-day MA of 266.11, indicating a neutral trend. The MACD of 3.06 indicates Positive momentum. The RSI at 61.52 is Neutral, neither overbought nor oversold. The STOCH value of 69.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:ESSITY.A.
Essity Aktiebolag Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | kr180.18B | 14.63 | ― | 3.09% | -1.91% | -40.37% | |
71 Outperform | kr184.42B | 15.02 | 14.26% | 3.12% | -1.91% | -40.37% | |
66 Neutral | €4.89B | 14.95 | 9.65% | 4.79% | 3.79% | 39.15% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% |
* Consumer Defensive Sector Average
SE:ESSITY.A
Essity Aktiebolag
264.50
-23.55
-8.18%
SE:ESSITY.B
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264.70
-24.62
-8.51%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.