Essity (OM:ESSITY B): Reassessing Valuation After Strategic Supply Chain Leadership Overhaul

Essity (OM:ESSITY B) is shaking up its operations playbook by naming Ilham Smaali as Chief Supply Chain Officer and launching a Supply Chain Enablement unit to sharpen scale, standardization and execution across its global network.

See our latest analysis for Essity.

The leadership shake up lands at a time when Essity’s share price has drifted lower year to date, despite a solid 90 day share price return of 6.93 percent and a positive five year total shareholder return of 16.81 percent, which hints at gradually rebuilding momentum.

If this kind of operational reset at Essity has you thinking about where else disciplined execution might pay off, it could be worth exploring stable growth stocks screener (None results)

With the shares trading below analyst targets yet still up over the medium term, are investors looking at a temporarily unloved compounder or a stock where the market has already priced in the next leg of growth?

Most Popular Narrative Narrative: 5.6% Undervalued

Against Essity’s last close at SEK265.4, the most followed narrative pegs fair value modestly higher, implying a slightly mispriced but not extreme opportunity.

Innovations in premium, eco-friendly, and coreless products, together with industry recognition for sustainability, position Essity to capitalize on shifting consumer preference for sustainable and higher-value tissue and hygiene products, which supports both topline growth and margin expansion.

Read the complete narrative.

Curious how modest growth, rising margins and a rerating in the profit multiple can still justify a higher fair value than today’s price? The full narrative breaks down the exact revenue path, earnings climb and valuation mindset that underpin this seemingly cautious but confident upside case.

Result: Fair Value of $281.08 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weak volume growth and sustained promotional pressure could quickly erode margins and challenge the idea that Essity’s current valuation leaves comfortable upside.

Find out about the key risks to this Essity narrative.

Build Your Own Essity Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom thesis in just minutes: Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Essity.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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