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Essity Aktiebolag (SE:ESSITY.A)
:ESSITY.A
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Essity Aktiebolag
(ESSITY.A)
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Rating:75Outperform
Price Target:
kr296.00
▲(12.98% Upside)
Essity Aktiebolag's overall stock score reflects strong earnings call performance and solid valuation, supported by positive technical indicators. Financial performance shows operational efficiency but highlights challenges in revenue growth and cash flow. The company's strategic focus on cost savings and reinvestment into growth areas positions it well for future improvements.
Positive Factors
Cost Management
The cost-saving program will enhance profitability by reducing SG&A expenses, allowing reinvestment into growth areas, thus supporting long-term financial health.
Product Innovation
Innovative product launches address unmet needs, driving growth in the Medical Solutions business and strengthening market position.
Operational Efficiency
High profit margins indicate effective cost management and operational efficiency, contributing to sustainable long-term profitability.
Negative Factors
Revenue Growth Challenges
Negative revenue growth reflects challenges in market expansion, potentially impacting future sales and market share.
Declining Profitability
Declining net profit margins suggest reduced profitability, which may affect the company's ability to reinvest in growth initiatives.
Cash Flow Decline
A decline in free cash flow growth can limit the company's capacity to finance new projects and manage debt, affecting long-term financial stability.
Essity Aktiebolag (ESSITY.A) vs. iShares MSCI Sweden ETF (EWD)
Market Cap
kr180.18B
Dividend Yield3.19%
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-10.31% 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 leading global hygiene and health company based in Sweden. It operates in the sectors of personal care, consumer tissue, and professional hygiene, providing a wide range of products designed to improve well-being through innovative and sustainable solutions. Core products include feminine care items, incontinence products, baby care essentials, and various tissue paper products, catering to both consumer and professional markets.
How the Company Makes MoneyEssity generates revenue primarily through the sale of its diverse product lines in personal care, consumer tissue, and professional hygiene. The company operates under well-known brands such as Tena, Libero, and Tempo, which contribute significantly to its sales. Key revenue streams include direct sales to consumers through retail channels, sales to healthcare institutions, and business-to-business partnerships. Additionally, Essity invests in sustainability and innovation, which enhances its product offerings and market competitiveness. Strategic partnerships with suppliers and distributors also play a crucial role in expanding its market reach and driving revenue growth.
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 shows solid operational efficiency with consistent margins and a stable balance sheet. However, recent declines in revenue growth and free cash flow highlight potential challenges in market expansion and cash generation. The company maintains a balanced leverage position, but declining ROE and net profit margins suggest areas for improvement in profitability.Income Statement
Essity Aktiebolag's income statement shows a stable gross profit margin of around 32% over the years, indicating consistent cost management. However, the net profit margin has declined in the TTM period to 8.58% from 14.35% in 2024, mainly due to a decrease in net income. The revenue growth rate has been negative recently, with a -1.14% in the TTM period, reflecting challenges in expanding sales. Despite these challenges, the EBIT and EBITDA margins remain healthy, suggesting operational efficiency.75
Positive
Balance Sheet
The balance sheet reveals a moderate debt-to-equity ratio of 0.51 in the TTM period, showing a decrease from previous years, which indicates improved leverage management. The return on equity (ROE) has decreased to 14.82% in the TTM period from 23.65% in 2024, reflecting reduced profitability. The equity ratio remains stable, indicating a balanced capital structure.70
Positive
Cash Flow
Essity's cash flow statement shows a decline in free cash flow growth, with a significant drop of -20.14% in the TTM period. The operating cash flow to net income ratio is at 0.40, indicating a reasonable conversion of income to cash. The free cash flow to net income ratio is at 0.53, suggesting that a good portion of net income is being converted into free cash flow, despite recent declines.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 141.60B | 145.55B | 147.15B | 156.17B | 121.87B | 121.75B |
| Gross Profit | 46.18B | 47.13B | 45.13B | 37.23B | 35.09B | 39.44B |
| EBITDA | 25.42B | 26.14B | 20.90B | 15.44B | 20.45B | 24.89B |
| Net Income | 12.32B | 20.89B | 9.55B | 5.57B | 8.62B | 10.23B |
Balance Sheet | ||||||
| Total Assets | 167.62B | 185.28B | 202.99B | 210.60B | 175.05B | 154.65B |
| Cash, Cash Equivalents and Short-Term Investments | 7.72B | 15.62B | 5.19B | 4.50B | 4.09B | 5.15B |
| Total Debt | 39.20B | 43.78B | 60.98B | 71.52B | 56.83B | 45.88B |
| Total Liabilities | 83.64B | 96.54B | 123.59B | 134.04B | 106.54B | 91.30B |
| Stockholders Equity | 83.57B | 88.31B | 70.85B | 67.35B | 59.87B | 54.35B |
Cash Flow | ||||||
| Free Cash Flow | 6.32B | 9.40B | 14.68B | 5.92B | 7.31B | 11.21B |
| Operating Cash Flow | 13.65B | 16.80B | 21.57B | 12.87B | 14.67B | 17.82B |
| Investing Cash Flow | -3.01B | 9.41B | -7.11B | -14.50B | -12.13B | -7.09B |
| Financing Cash Flow | -16.13B | -22.34B | -11.55B | 1.81B | -3.81B | -8.38B |
Essity Aktiebolag Technical Analysis
Neutral
262.00
Price Trends
256.61
Positive
253.19
Positive
265.36
Negative
Market Momentum
0.52
Positive
50.31
Neutral
75.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:ESSITY.A, the sentiment is Neutral. The current price of 262 is above the 20-day moving average (MA) of 261.57, above the 50-day MA of 256.61, and below the 200-day MA of 265.36, indicating a neutral trend. The MACD of 0.52 indicates Positive momentum. The RSI at 50.31 is Neutral, neither overbought nor oversold. The STOCH value of 75.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | kr180.18B | 14.63 | ― | 3.19% | -1.91% | -40.37% | |
72 Outperform | kr180.40B | 14.69 | 14.26% | 3.13% | -1.91% | -40.37% | |
71 Outperform | €4.89B | 14.95 | 9.65% | 5.13% | 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
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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.