Fact based stock research
Essity Aktiebolag (OM:ESSITY B)

SE0009922164

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Essity Aktiebolag stock research in summary

essity.com

ANALYSIS: With an Obermatt Combined Rank of 44 (worse than 56% compared with investment alternatives), Essity Aktiebolag (Household Products, Sweden) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Essity Aktiebolag are a good value (attractively priced) with a consolidated Value Rank of 50 (better than 50% of alternatives) but show below-average growth (Growth Rank of 48), and are riskily financed (Safety Rank of 49), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 44, is a hold recommendation based on Essity Aktiebolag's financial characteristics. As the company Essity Aktiebolag's key financial metrics exhibit good value (Obermatt Value Rank of 50) but low growth (Obermatt Growth Rank of 48) and risky financing practices (Obermatt Safety Rank of 49), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 50% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	50
Growth Rank	48
Safety Rank	49
Combined Rank	44

Country	Sweden
Industry	Household Products
Index	Human Rights, OMX 30
Size class	XX-Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Essity Aktiebolag

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	60	63	63	50
GROWTH
GROWTH	11	37	71	48
SAFETY
SAFETY	16	25	12	49
SENTIMENT
SENTIMENT	n/a	24	42	^new
360° VIEW
360° VIEW	n/a	25	45	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Essity Aktiebolag is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	60	63	63	50
GROWTH
GROWTH	11	37	71	48
SAFETY
SAFETY	16	25	12	49
COMBINED
COMBINED	13	32	44	44

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Essity Aktiebolag the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 50 (better than 50% compared with alternatives), Essity Aktiebolag shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Essity Aktiebolag. Price-to-Profit (also referred to as price-earnings, P/E) is 57 which means that the stock price compared with what market professionals expect for future profits is lower than for 57% of comparable companies, indicating a good value concerning Essity Aktiebolag's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 36, which means that the stock price is lower as regards to invested capital than for 36% of comparable investments. On the other hand, Price-to-Sales is less favorable than 52% of alternatives (only 48% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 40% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 50, is a buy recommendation based on Essity Aktiebolag's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	65	67	70	48
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	55	64	70	57
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	31	46	37	36
DIVIDEND YIELD
DIVIDEND YIELD	71	55	75	60
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	60	63	63	50

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Essity Aktiebolag; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 48 (better than 48% compared with alternatives), Essity Aktiebolag shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Essity Aktiebolag. Profit Growth has a rank of 76, which means that currently professionals expect the company to grow its profits more than 76% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 67 (above 67% of alternative investments). But Sales Growth has a below the median rank of 19, which means that, currently, professionals expect the company to grow less than 81% of its competitors, and Capital Growth also has a lower rank of 28. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 48, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Essity Aktiebolag. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	5	66	18	19
PROFIT GROWTH
PROFIT GROWTH	n/a	12	82	76
CAPITAL GROWTH
CAPITAL GROWTH	n/a	70	85	28
STOCK RETURNS
STOCK RETURNS	41	45	39	67
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	11	37	71	48

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Essity Aktiebolag.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 49 (better than 49% compared with alternatives), the company Essity Aktiebolag has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Essity Aktiebolag is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Essity Aktiebolag. Liquidity is at 73, meaning the company generates more profit to service its debt than 73% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 33, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 67% of its competitors. Leverage is also high at a rank of 36, which means that the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 49 (worse than 51% compared with alternatives), Essity Aktiebolag has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	22	25	18	36
REFINANCING
REFINANCING	39	22	23	33
LIQUIDITY
LIQUIDITY	37	65	44	73
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	16	25	12	49

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Essity Aktiebolag and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	23	44	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	55	31	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	47	65	^new
MARKET PULSE
MARKET PULSE	n/a	34	39	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	24	42	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Essity Aktiebolag.
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