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On Monday, Jefferies analysts downgraded Huhtamaki Oyj (HUH1V:FH) stock from a Buy to a Hold rating, adjusting the price target to €35.00 from €40.00. The shift reflects concerns about the company’s volume recovery, which is seen as crucial for realizing operating leverage benefits in earnings and stock performance.
Analysts highlighted the company’s current valuation at 13.6x PE compared to a five-year average of 15.4x. They expressed concerns about the need for a volume recovery to drive earnings improvements and support stock performance. The uncertainty in foodservice and consumer spending during the first half of 2025, along with foreign exchange cuts, are factors contributing to the delayed recovery.
Muted retail sales in the tableware segment, as reported by Nielsen up to May 2025, further add to the cautious outlook. Jefferies analysts noted that this situation poses risks to Huhtamaki’s second-quarter outlook, with their EBIT forecast of €405 million falling 4% below the consensus estimate of €422 million.
The analysts also mentioned their expectations for 2024, projecting an EBIT of €417 million. The downgrade comes amid broader concerns about the company’s ability to navigate current market challenges and achieve the necessary volume recovery to enhance its financial performance.
Jefferies’ decision to lower the rating and adjust the price target reflects a cautious stance on Huhtamaki’s near-term prospects, emphasizing the need for a clearer path to recovery in the company’s key markets.
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