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We retain Suominen’s target price of 3.30 EUR and recommendation to reduce. Suominen’s profit history is bumpy from the last decade while the company has been suffering raw-material and supply chain driven margin issues during the last 12 months. Now the worst seems to be over in these fronts. We argue Suominen’s valuation is moderate compared to the company’s normalized profit potential, but uncertainty related to profit turnaround remains high in short-term. Thus, we estimate that Suominen’s expected TSR does not yet beat the return requirement for the next 12 months and we continue to wait for a slightly more attractive risk/reward-ratio.

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Trade. (Suominen)

Suominen manufactures nonwovens as roll goods for wipes and for hygiene products and medical applications. Suominen is the global market leader in nonwovens for wipes. The company employs nearly 650 people in Europe and in the Americas. The Suominen share (SUY1V) is listed on the Nasdaq Helsinki Stock Exchange.