Waiting for a trend change
We retain our 3.50 euro target price and reduce recommendation for Suominen. We estimate that Suominen’s earnings will recover from difficult years of 2016 and 2017, where critical elements are pricing, product mix transformation, and production ramp-up in Bethune. However, we consider short term valuation too high given major uncertainty over the speed of profit recovery in challenging trading conditions. Medium term potential remains but we are not willing to stretch short term valuation at this point.
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Suominen is a manufacturing company. The company manufactures and develops a wide range of wipes, hygiene products and medical applications. The manufacturing is based on non-woven fabrics that can be used for various purposes. Customers are found in several industries, with the largest operations in Europe and North America. The company has its headquarters in Helsinki.
Read more on company pageKey Estimate Figures03.07.2018
| 2017 | 18e | 19e | |
|---|---|---|---|
| Revenue | 426.0 | 433.3 | 459.4 |
| growth-% | 2.2 % | 1.7 % | 6.0 % |
| EBIT (adj.) | 15.0 | 16.0 | 24.6 |
| EBIT-% (adj.) | 3.5 % | 3.7 % | 5.4 % |
| EPS (adj.) | 0.17 | 0.09 | 0.16 |
| Dividend | 0.07 | 0.07 | 0.07 |
| Dividend % | 2.5 % | 9.5 % | 10.4 % |
| P/E (adj.) | 16.4 | 8.3 | 4.4 |
| EV/EBITDA | 9.9 | 3.9 | 2.8 |
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