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Investing.com - Deutsche Bank initiated coverage on Electrolux AB (SS:ELUXB) (OTC:ELUXY) with a Hold rating and a price target of SEK60.00 on Tuesday. The stock, currently trading near its 52-week low at $10.97, has seen a significant decline of over 42% in the past year, though InvestingPro analysis suggests the shares may be undervalued at current levels.
The research firm notes that the European white-goods manufacturer has struggled with challenging industry conditions and declining market share over the past decade, prompting a strategic shift toward premium market segments to differentiate its brands and revitalize its product portfolio.
Deutsche Bank points out that Electrolux has undertaken significant operational restructuring and invested in modernizing production facilities, financed through increased debt despite weak demand conditions, and now must navigate a complex tariff environment and soft demand in key markets with its modernized facilities and reduced workforce.
The bank identifies cost efficiencies as central to the investment case, focusing on margin repair and debt reduction, with the U.S. market and its tariff implications playing a crucial role in the company’s recovery strategy.
Deutsche Bank expects a gradual recovery for Electrolux but cautions that free cash flow could disappoint, potentially leading to slower deleveraging, and does not anticipate a dividend for fiscal year 2025.
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