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Investing.com - Barclays (LON:BARC) downgraded Essity AB (SS:ESSITYB) from Equalweight to Underweight and cut its price target to SEK230.00 from SEK290.00, citing increased pressure from private label products in Europe.
The downgrade reflects growing concerns about Essity’s Consumer Goods segment in Europe, which appears to be facing renewed competition from private label alternatives, according to Barclays’ analysis.
The investment bank identified additional headwinds for the hygiene products manufacturer, including tougher comparisons for its Incontinence business as 2025 progresses and weakness in North America weighing on the Professional Hygiene segment.
Barclays forecasts Essity’s organic sales growth at 1.5% for fiscal year 2025, below the Bloomberg consensus estimate of 2.1%, and notes a lack of potential positive catalysts that could rebuild momentum for the stock.
The new SEK230 price target, which Barclays indicates is the lowest on Wall Street, values Essity at 11 times its estimated FY26 price-to-earnings ratio.
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