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Essity AB Class B (SE:ESSITY.B)
:ESSITY.B

Essity AB (ESSITY.B) AI Stock Analysis

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SE:ESSITY.B

Essity AB

(OTC:ESSITY.B)

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Outperform 72 (OpenAI - 4o)
Rating:72Outperform
Price Target:
kr291.00
▲(10.14% Upside)
Essity AB's overall stock score reflects its strong operational efficiency and strategic initiatives to drive growth. While the company faces challenges in certain segments, its fair valuation and positive earnings call sentiment contribute positively to the score. The balanced technical indicators suggest a stable outlook.
Positive Factors
Reorganization and Cost-Saving Initiatives
The reorganization and cost-saving initiatives are likely to enhance operational efficiency and profitability, positioning Essity for sustainable growth.
Innovation in Health and Medical Segments
Innovative products in health and medical segments can strengthen market position and boost long-term revenue growth through enhanced product offerings.
Strong Cash Flow and Profit
Robust cash flow and profitability provide financial stability and flexibility, enabling Essity to invest in growth opportunities and withstand market challenges.
Negative Factors
Decline in Consumer Tissue and Baby Segments
Challenges in key segments like Consumer Tissue and Baby can hinder overall revenue growth and market share, affecting long-term business performance.
Impact of Currency Fluctuations
Currency fluctuations can adversely impact financial results, reducing competitiveness in international markets and affecting profitability.
Declining Free Cash Flow Growth
A decline in free cash flow growth can limit Essity's ability to reinvest in business expansion and innovation, potentially impacting long-term growth prospects.

Essity AB (ESSITY.B) vs. iShares MSCI Sweden ETF (EWD)

Essity AB Business Overview & Revenue Model

Company DescriptionEssity AB is a global hygiene and health company based in Sweden, focusing on the production and sale of personal care and tissue products. The company operates primarily in two segments: Consumer Goods and Professional Hygiene. Its core products include toilet paper, paper towels, diapers, feminine hygiene products, and incontinence products, which are marketed under well-known brands such as TENA, Libero, and Tempo. Essity is committed to sustainability and innovation, aiming to improve well-being through its products while minimizing environmental impact.
How the Company Makes MoneyEssity generates revenue through the sale of its hygiene and health products across various consumer and professional segments. The company's primary revenue streams include the sale of consumer goods, which encompass personal care products like diapers and feminine hygiene items, as well as professional hygiene products for businesses, such as washroom hygiene solutions and industrial wipes. Additionally, Essity benefits from strong brand recognition, which contributes to customer loyalty and repeat purchases. The company has established significant partnerships with retailers and distributors globally, ensuring a widespread presence in various markets. Factors such as innovation in product development, a focus on sustainability, and expanding into emerging markets further enhance its earning potential.

Essity AB Earnings Call Summary

Earnings Call Date:Oct 23, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Jan 22, 2026
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with a focus on innovation and growth initiatives. Despite some challenges in specific segments and markets, Essity has demonstrated resilience with strong profit margins and strategic reorganization plans to drive future growth.
Q3-2025 Updates
Positive Updates
Positive Organic Sales Growth
Essity reported a 0.9% organic sales growth in Q3 2025, with price being the most significant contributor. Growth was observed across all three business areas.
Record High Gross Profit Margins
The company achieved record high gross profit margins, contributing to a profit margin of 14.6%.
Strong Cash Flow and Profit
Essity generated a strong cash flow and reported a profit above SEK 5 billion.
Innovations in Health and Medical
The launch of Actimove Manus Air and TENA Pro skin stretch day and night products are expected to drive future growth in medical and incontinence care segments.
Growth in U.S. Retail Incontinence Sales
Incontinence sales in U.S. retail grew by 21% in the quarter.
Improvement in Baby Segment
The baby segment showed improvement with a reduced volume decline from 4.5% in previous quarters to about 1% in Q3 2025.
Professional Hygiene Improvement
Sequential volume improvement in Professional Hygiene attributed to selective price adjustments and focus on the value segment.
Reorganization and Cost-Saving Initiatives
Essity announced a reorganization into four global business units and a cost-saving program expected to generate SEK 1 billion by the end of 2026.
Negative Updates
Decline in Consumer Tissue and Baby Segments
The Consumer Tissue segment suffered from weaker consumer sentiment and increased price competitiveness, while the Baby segment continued to decline albeit at a lower rate.
Challenging Market Conditions in Incontinence Care
Despite strong underlying growth in certain markets, challenging market conditions persist in others for Incontinence Care.
Impact of Currency Fluctuations
Essity's absolute sales were down by 4.5% due to the strengthening of the Swedish krona despite organic sales growth.
High Price Competition in Consumer Tissue
The Consumer Tissue business faced significant price competition, impacting volume growth.
Tariff Impact
Essity faced a tariff impact of SEK 110 million in Q3, expected to be SEK 70 million in Q4.
Company Guidance
In the recent call, Essity outlined its Q3 2025 performance, reporting a 0.9% organic sales growth with contributions from price, volume, and mix, leading to a profit margin of 14.6%. The company achieved a strong cash flow and a profit exceeding SEK 5 billion. To accelerate growth, Essity announced two key initiatives: a reorganization into four global business units with full P&L responsibility and a cost-saving program aiming to reduce SG&A by SEK 1 billion by the end of 2026. The Health and Medical segment marked its 18th consecutive quarter of growth, driven by innovation in medical solutions and incontinence care. In the U.S., incontinence retail sales surged by 21%, while Feminine Care continued to grow robustly, particularly in Mexico. However, challenges persisted in Consumer Tissue and Baby categories due to weakening consumer sentiment and competitive pressures. The company remains focused on executing its strategy to drive profitable growth and improve margins through targeted investments and efficiency improvements.

Essity AB Financial Statement Overview

Summary
Essity AB shows strong operational efficiency and a stable financial position. However, challenges in revenue growth and profitability are evident, with declining net profit margins and ROE. Cash flow generation is adequate, but the decline in free cash flow growth is concerning.
Income Statement
75
Positive
Essity AB's income statement shows a stable gross profit margin around 32-33% over recent years, indicating consistent cost management. However, the net profit margin has declined from 14.35% in 2024 to 8.58% in TTM, reflecting reduced profitability. The revenue growth rate is negative in recent periods, with a notable decline of 1.14% in TTM, suggesting challenges in expanding sales. EBIT and EBITDA margins remain stable, indicating operational efficiency. Overall, the company demonstrates solid profitability but faces growth challenges.
Balance Sheet
70
Positive
Essity AB's balance sheet reflects a moderate debt-to-equity ratio of 0.51 in TTM, showing a manageable level of leverage. The return on equity has decreased from 23.65% in 2024 to 14.82% in TTM, indicating reduced shareholder returns. The equity ratio is stable, suggesting a balanced capital structure. While the company maintains a healthy financial position, the declining ROE highlights potential profitability concerns.
Cash Flow
65
Positive
The cash flow statement reveals a decline in free cash flow growth, with a significant drop of 20.14% in TTM. The operating cash flow to net income ratio is stable, indicating consistent cash generation relative to earnings. However, the free cash flow to net income ratio has decreased, reflecting challenges in converting earnings into free cash flow. While cash flow generation remains adequate, the declining free cash flow growth rate is a concern.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue141.60B145.55B147.15B156.17B121.87B121.75B
Gross Profit46.18B47.13B45.13B37.23B35.09B39.44B
EBITDA25.42B26.14B20.90B15.44B20.45B24.89B
Net Income12.32B20.89B9.55B5.57B8.62B10.23B
Balance Sheet
Total Assets167.62B185.28B202.99B210.60B175.05B154.65B
Cash, Cash Equivalents and Short-Term Investments7.72B15.62B5.19B4.50B4.09B5.15B
Total Debt39.20B43.78B60.98B71.52B56.83B45.88B
Total Liabilities83.64B96.54B123.59B134.04B106.54B91.30B
Stockholders Equity83.57B88.31B70.85B67.35B59.87B54.35B
Cash Flow
Free Cash Flow6.32B9.40B14.68B5.92B7.31B11.21B
Operating Cash Flow13.65B16.80B21.57B12.87B14.67B17.82B
Investing Cash Flow-3.01B9.41B-7.11B-14.50B-12.13B-7.09B
Financing Cash Flow-16.13B-22.34B-11.55B1.81B-3.81B-8.38B

Essity AB Technical Analysis

Technical Analysis Sentiment
Positive
Last Price264.20
Price Trends
50DMA
261.93
Positive
100DMA
255.55
Positive
200DMA
263.87
Positive
Market Momentum
MACD
1.22
Negative
RSI
57.59
Neutral
STOCH
87.96
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:ESSITY.B, the sentiment is Positive. The current price of 264.2 is above the 20-day moving average (MA) of 261.85, above the 50-day MA of 261.93, and above the 200-day MA of 263.87, indicating a bullish trend. The MACD of 1.22 indicates Negative momentum. The RSI at 57.59 is Neutral, neither overbought nor oversold. The STOCH value of 87.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:ESSITY.B.

Essity AB Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
kr182.76B14.8914.26%3.11%-1.91%-40.37%
71
Outperform
kr5.71B22.8151.65%2.54%48.79%38.02%
71
Outperform
€4.79B14.669.65%4.90%3.79%39.15%
68
Neutral
kr124.62M19.655.40%8.54%-4.76%
62
Neutral
$20.33B14.63-3.31%3.23%1.93%-12.26%
39
Underperform
€25.49M-0.25-354.88%-15.74%44.98%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SE:ESSITY.B
Essity AB
265.10
-21.11
-7.38%
SE:ZZ.B
Zinzino AB
157.20
76.70
95.27%
SE:DUNI
Duni AB
102.00
12.51
13.98%
SE:LCLEAN
LifeClean International AB
0.09
-1.16
-92.59%
SE:CLEM
Clemondo Group AB
9.00
1.67
22.78%
SE:LNFI
Ellen AB
0.81
-0.22
-21.36%

Essity AB Corporate Events

Essity AB Announces Strategic Reorganization of Business Areas
Dec 2, 2025

Essity AB announced a reorganization of its business areas effective January 1, 2026, to enhance growth and achieve financial targets more swiftly. The new structure will consist of Health & Medical, Personal Care, Consumer Tissue, and Professional Hygiene, replacing the previous categories. This strategic change is expected to streamline operations and improve market focus, potentially impacting stakeholders positively by aligning the company’s offerings with market demands.

Essity AB Advances Share Buyback Program with Recent Repurchase
Dec 1, 2025

Essity AB announced the repurchase of 186,672 Class B shares as part of its SEK 3 billion buyback program, which is set to continue until the 2026 Annual General Meeting. This strategic move, financed by cash flow from current operations, aims to make share buybacks a recurring element of Essity’s capital allocation strategy, potentially enhancing shareholder value and market positioning.

Essity Announces Share Conversion Impacting Voting Structure
Nov 28, 2025

Essity has announced the conversion of 126,996 Class A shares to Class B shares, reducing the total number of votes in the company to 1,218,174,411. This conversion aligns with the company’s articles of association, allowing shareholders to change their share class and impacting the company’s voting structure.

Essity Advances Share Buyback Program with Recent Repurchase
Nov 24, 2025

Essity has repurchased 200,723 Class B shares as part of its SEK 3 billion buyback program, which began in April 2025 and will continue until the 2026 Annual General Meeting. This buyback is financed through cash flow from operations and aims to make share repurchases a recurring element of Essity’s capital allocation strategy, reflecting a commitment to enhancing shareholder value.

Essity Earns EcoVadis Platinum Medal for Sustainability Excellence
Nov 19, 2025

Essity has been awarded the EcoVadis Platinum medal for its exceptional sustainability leadership in 2025, placing it among the top 1% of companies globally for sustainability performance. With an improved score of 88 out of 100, Essity demonstrated outstanding achievements in environmental stewardship, ethical business conduct, and transparent reporting, reflecting its commitment to sustainable business practices and long-term value creation.

Essity Advances SEK 3 Billion Share Buyback Program
Nov 17, 2025

Essity has repurchased 141,656 Class B shares as part of its SEK 3 billion buyback program, which is set to run until the 2026 Annual General Meeting. This initiative, financed by cash flow from operations, aims to make share buybacks a recurring element of Essity’s capital allocation strategy, potentially enhancing shareholder value.

Essity Expands in North America with Acquisition of Edgewell’s Feminine Care Business
Nov 12, 2025

Essity has announced the acquisition of Edgewell Personal Care’s feminine care business in North America, including brands like Carefree, Stayfree, and Playtex, for USD 340 million. This strategic move aims to strengthen Essity’s position in the high-margin feminine care category within the US market, the largest hygiene market globally. The acquisition is expected to enhance Essity’s market presence and operational capabilities, with the transaction anticipated to close in the first quarter of 2026, pending regulatory approvals.

Essity Executes Share Buyback as Part of Capital Strategy
Nov 10, 2025

Essity announced the repurchase of 215,029 Class B shares as part of a SEK 3 billion buyback program initiated in April 2025. This strategic move is financed through cash flow from operations and is intended to be a recurring element of Essity’s capital allocation strategy, potentially enhancing shareholder value and market positioning.

Essity Advances SEK 3 Billion Share Buyback Program
Nov 3, 2025

Essity has announced the repurchase of 162,610 Class B shares as part of its SEK 3 billion buyback program, which is set to run until the 2026 Annual General Meeting. This initiative, financed through cash flow from operations, aims to make share buybacks a recurring component of Essity’s capital allocation strategy, potentially enhancing shareholder value and demonstrating financial stability.

Essity Advances Share Buyback Program with Recent Repurchase
Oct 27, 2025

Essity announced the repurchase of 86,370 Class B shares as part of its SEK 3bn buyback program, which is set to continue until the 2026 Annual General Meeting. The buyback is financed through cash flow from operations after dividends, aiming to make share repurchases a regular aspect of Essity’s capital allocation strategy, potentially impacting shareholder value and market perception.

Essity Announces Strategic Organizational Changes for Profitable Growth
Oct 23, 2025

Essity is implementing organizational changes to enhance profitable growth by decentralizing decision-making and increasing accountability across product categories. This includes a cost savings program targeting SEK 1bn in annual savings by the end of 2026, focusing on sales and administrative expenses, with the aim to reinvest in profitable volume growth.

Essity Advances Share Buyback Program with Recent Repurchase
Oct 20, 2025

Essity has repurchased 249,659 Class B shares as part of a SEK 3bn buyback program, which is set to run until the 2026 Annual General Meeting. This initiative, financed by cash flow from operations, aims to make share buybacks a recurring element of Essity’s capital allocation strategy, potentially impacting shareholder value and market perception.

Essity Advances Share Buyback Program with Recent Class B Shares Repurchase
Oct 13, 2025

Essity has repurchased 274,102 Class B shares as part of its SEK 3bn buyback program, which aims to enhance capital allocation through recurring share buybacks. This initiative, financed by cash flow from current operations, reflects Essity’s strategic focus on optimizing shareholder value and adhering to EU regulations.

Essity Advances SEK 3 Billion Share Buyback Program
Oct 6, 2025

Essity has repurchased 266,241 Class B shares as part of its SEK 3 billion buyback program initiated in April 2025. This move, financed through operational cash flow, aims to make share buybacks a recurring element of Essity’s capital allocation strategy, potentially enhancing shareholder value and market positioning.

Essity Executes Share Buyback as Part of Strategic Capital Allocation
Sep 29, 2025

Essity announced the repurchase of 293,620 Class B shares as part of its SEK 3 billion buyback program, which runs until the 2026 Annual General Meeting. This initiative, financed through cash flow from operations, aims to enhance shareholder value and is conducted in compliance with EU regulations, reflecting Essity’s strategic capital allocation approach.

Essity to Release Q3 2025 Interim Report
Sep 23, 2025

Essity announced it will release its third-quarter interim report for 2025 on October 23. The report will be presented by President and CEO Ulrika Kolsrud and CFO Fredrik Rystedt via a live webcast and teleconference, providing stakeholders with insights into the company’s financial performance and strategic direction.

Essity Advances Share Buyback Program with Recent Repurchase
Sep 22, 2025

Essity has repurchased 271,160 Class B shares as part of its SEK 3 billion buyback program, which aims to enhance capital allocation through share buybacks financed by cash flow from operations. This strategic move is expected to impact Essity’s market positioning by potentially increasing shareholder value and optimizing capital structure.

Essity Announces Executive Management Change
Sep 19, 2025

Essity announced the departure of Donato Giorgio, President of Global Supply Chain and Executive Management Team member, effective October 31, 2025. Giorgio, who joined Essity in 2009, significantly contributed to the company’s sustainable manufacturing and circular resource solutions. The recruitment process for his successor is underway.

Essity Advances Share Buyback Program with Recent Repurchase
Sep 15, 2025

Essity has repurchased 243,717 Class B shares as part of its SEK 3 billion buyback program, which is set to continue until the 2026 Annual General Meeting. This initiative, financed through cash flow from operations, aims to make share buybacks a recurring element of Essity’s capital allocation strategy, potentially impacting shareholder value and market perception.

Essity Executes Share Buyback as Part of Strategic Capital Allocation
Sep 8, 2025

Essity has repurchased 387,564 Class B shares as part of its SEK 3bn buyback program, which is set to run until the 2026 Annual General Meeting. This initiative, funded by cash flow from operations, is intended to be a recurring element of Essity’s capital allocation strategy, potentially enhancing shareholder value and market positioning.

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.Date of analysis: Nov 27, 2025