Essity Aktiebolag (ESSITY.A) AI Stock Analysis

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Essity Aktiebolag

(ESSITY.A)

70Outperform

Essity Aktiebolag demonstrates solid financial management, with strong cash flow and operational stability, contributing positively to its stock score. However, technical indicators show a lack of upward momentum, and recent earnings call challenges, such as higher costs and volume declines, present risks. The fair valuation with a reasonable P/E ratio and attractive dividend yield provides support, yet these factors are balanced by the company's ongoing challenges in specific segments.

Essity Aktiebolag (ESSITY.A) vs. S&P 500 (SPY)

Market Cap

kr194.20B

Dividend Yield3.04%

Average Volume (3M)13.95K

Price to Earnings (P/E)16.0

Beta (1Y)0.18

Revenue Growth-8.34%

EPS Growth-31.13%

CountrySE

Employees36,000

SectorConsumer Defensive

Sector Strength90

IndustryHousehold & Personal Products

Share Statistics

EPS (TTM)4.13

Shares Outstanding58,973,656

10 Day Avg. Volume16,382

30 Day Avg. Volume13,952

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

Price to Cash Flow (P/CF)N/A

P/FCF RatioN/A

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Essity Aktiebolag Business Overview & Revenue Model

Company DescriptionEssity Aktiebolag (ESSITY.A) is a global leader in hygiene and health products, headquartered in Stockholm, Sweden. The company operates in three main business areas: Personal Care, Consumer Tissue, and Professional Hygiene. Essity's core products include incontinence products, baby diapers, feminine care products, consumer tissue such as toilet paper and kitchen rolls, and a range of products for professional hygiene in public and workplace settings. Essity is committed to improving well-being through its products and sustainability initiatives.

How the Company Makes MoneyEssity makes money through the sale of its diverse range of hygiene and health products across its three main business areas: Personal Care, Consumer Tissue, and Professional Hygiene. Revenue is generated from both retail sales to individual consumers and bulk sales to businesses and institutions. In Personal Care, Essity earns through products like incontinence care, baby care, and feminine care, often collaborating with healthcare providers and leveraging strong brand names like TENA and Libero. In Consumer Tissue, revenue comes from the sale of toilet paper, facial tissues, and paper towels, with well-known brands such as Lotus and Tempo. Professional Hygiene focuses on supplying businesses and institutions with hygiene solutions under brands like Tork. The company also engages in strategic partnerships and acquisitions to enhance its market presence and leverage synergies across its operations. Essity's earnings are significantly influenced by its global distribution network, brand strength, and ongoing innovation in product development.

Essity Aktiebolag Financial Statement Overview

Summary

Essity Aktiebolag presents a solid financial profile with strong operational margins and effective cash flow management. The company's strategic focus on deleveraging has improved its financial stability, although revenue growth remains flat. Continued emphasis on enhancing return on equity and maintaining cash efficiency will be crucial for sustained financial performance.

Income Statement

Positive

Essity Aktiebolag has demonstrated consistent revenue generation with a stable gross profit margin of approximately 32% over the TTM period. The net profit margin for the TTM stands at 8.63%, which is a notable recovery from the previous year's performance. Although revenue growth has been flat, the company has maintained strong EBIT and EBITDA margins, indicating efficient cost management and operational stability.

Balance Sheet

Positive

The balance sheet reflects a strong equity position with an equity ratio of 46.3% in the TTM period. The elimination of total debt in the TTM indicates a significant deleveraging effort, enhancing financial stability. However, the lower return on equity (ROE) of 15.85% suggests room for improvement in generating returns from shareholder investments.

Cash Flow

Positive

Essity's cash flow performance is robust, with a favorable operating cash flow to net income ratio of 1.28 in the TTM. The free cash flow to net income ratio is 0.71, indicating efficient cash conversion. Although there was a decline in free cash flow compared to the previous year, the overall cash flow management remains strong.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
145.67B	145.55B	147.15B	156.17B	121.87B	121.75B
	Gross Profit
47.14B	47.13B	45.13B	37.23B	35.09B	39.44B
	EBIT
18.59B	18.30B	17.75B	9.48B	13.20B	16.76B
	EBITDA
26.20B	26.14B	20.90B	15.44B	20.45B	24.89B
	Net Income Common Stockholders
12.57B	20.89B	9.55B	5.57B	8.62B	10.23B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
12.66B	15.62B	5.19B	4.50B	4.09B	5.15B
	Total Assets
171.24B	185.28B	202.99B	210.60B	175.05B	154.65B
	Total Debt
0.00	43.78B	60.98B	66.58B	56.83B	45.88B
	Net Debt
-9.77B	32.81B	55.83B	62.29B	52.93B	40.90B
	Total Liabilities
91.54B	96.54B	123.59B	134.04B	106.54B	91.30B
	Stockholders Equity
79.29B	88.31B	70.85B	67.35B	59.87B	54.35B
Cash Flow		Free Cash Flow
8.88B	9.37B	14.68B	5.92B	7.31B	11.21B
	Operating Cash Flow
16.04B	16.80B	21.57B	12.87B	14.67B	17.82B
	Investing Cash Flow
-4.87B	9.41B	-7.11B	-14.50B	-12.13B	-7.09B
	Financing Cash Flow
-12.55B	-22.34B	-11.55B	1.81B	-3.81B	-8.38B

Essity Aktiebolag Technical Analysis

Technical Analysis Sentiment

Negative

Last Price271.50

Price Trends

50DMA

284.12

Negative

100DMA

283.93

Negative

200DMA

290.18

Negative

Market Momentum

MACD

-1.77

Positive

RSI

40.75

Neutral

STOCH

37.44

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:ESSITY.A, the sentiment is Negative. The current price of 271.5 is below the 20-day moving average (MA) of 280.69, below the 50-day MA of 284.12, and below the 200-day MA of 290.18, indicating a bearish trend. The MACD of -1.77 indicates Positive momentum. The RSI at 40.75 is Neutral, neither overbought nor oversold. The STOCH value of 37.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:ESSITY.A.

Essity Aktiebolag Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACAD	79 Outperform	€8.29B	11.27	11.51%	2.09%	14.19%	38.27%
AMBEA	79 Outperform	€9.64B	15.40	12.33%	1.30%	6.63%	42.82%
DUNI	74 Outperform	€4.45B	17.67	6.76%	5.18%	1.68%	-38.11%
CLA.B	73 Outperform	kr7.97B	16.57	9.04%	3.15%	3.76%	9.03%
ESSITY.A	70 Outperform	kr194.20B	16.02		3.04%	-8.34%	-31.13%
Sector *	64 Neutral	$9.18B	14.52	4.32%	185.59%	3.96%	5.53%
MSON.B	60 Neutral	kr1.39B	29.52	1.53%	―	-1.74%	―

* Consumer Defensive Sector Average

Performance Comparison

SE:ESSITY.A

Essity Aktiebolag

271.50

4.82

1.81%

SE:CLA.B

Cloetta AB

27.60

11.52

71.68%

SE:ACAD

AcadeMedia AB

83.70

34.64

70.59%

SE:AMBEA

Ambea AB

113.30

51.52

83.39%

SE:DUNI

Duni AB

94.70

-3.86

-3.91%

SE:MSON.B

Midsona AB Class B

9.54

1.54

19.25%

Essity Aktiebolag Earnings Call Summary

Earnings Call Date: Apr 24, 2025 | % Change Since: -4.74% | Next Earnings Date: Jul 17, 2025

Earnings Call Sentiment Neutral

Essity's Q1 2025 earnings call presented a mixed picture. While there were several positive elements such as strong cash flow, a new share buyback program, and limited impact from tariffs, the company faced challenges with higher costs and volume declines in key segments.

Highlights

Strong Cash Flow and Balance Sheet

Essity reported a strong cash flow and a solid balance sheet. The company has continued to reduce its net debt, which is now close to SEK27 billion, with a net debt to EBITDA ratio of roughly about 1.

New Share Buyback Program

Essity announced a new SEK3 billion share buyback program to allocate its strong operating cash flow. The program begins immediately and extends until the next AGM.

Product Superiority

Essity reported that 71% of its branded sales are perceived to be superior in terms of price, mix, and product attributes and features, which drives customer preference and purchase intent.

Limited Impact from Tariffs

Essity indicated that the impact from tariffs is limited due to its global business model, where products are typically produced and raw materials sourced where they are sold.

Lowlights

Higher COGS and SG&A

The company faced challenges with higher costs of goods sold (COGS) and selling, general and administrative expenses (SG&A), primarily due to inflation and investments in growing the business.

Volume Declines in Professional Hygiene

Essity reported a decline in volumes for its Professional Hygiene segment, particularly in North America, attributed to softer demand in the foodservice space.

Weakness in Baby Care Segment

The Baby Care segment saw a decline of 6.5%, attributed to lower demand and strong competitive pressures with high-priced promotions.

Company Guidance

During Essity's Q1 2025 earnings call, the company reported a solid start to the year with higher sales and strong cash flow across all business areas. The Health & Medical and Professional Hygiene sectors experienced growth in sales, driven by positive price and mix contributions, though Professional Hygiene saw a decline in volumes. Despite higher COGS, attributed mainly to raw materials and distribution, and increased SG&A expenses due to inflation and business investments, Essity maintained a stable volume performance. The company announced a SEK3 billion share buyback program, leveraging its strong operating cash flow. Essity's global production and sourcing strategy mitigates the impact of tariffs, particularly in North America, where 90% of Professional Hygiene products are locally produced. The company also highlighted successful product launches, contributing to a superior product perception rate of over 70%, and expects further improvements throughout the year.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.