In its latest update, Asaleo Care formally rejected Essity’s $1.26 cash offer. The company’s operating income for 2020 was almost in-line with Credit Suisse’s forecast. The broker considers the quality of earnings good.
Margin is expected to improve in 2022 with synergy from its Toms segment. On the flip side, pulp costs are forecast to rise by 10% in 2021 due to shortage in China and pose a risk.
Credit Suisse keeps target at $1.50 and maintains the Outperform rating.
Sector: Household & Personal Products.
Target price is $1.50.Current Price is $1.32. Difference: $0.18 – (brackets indicate current price is over target). If AHY meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).
