On Wednesday, JPMorgan adjusted its outlook on Electrolux AB (ELUXB:SS) (OTC: ELUXY), reducing the share price target to SEK88 from SEK93 while maintaining a Neutral rating on the stock.
The revision comes as the firm finalizes its second-quarter estimates, taking into account factors such as exchange rates, industry peer commentary, and the continued impact of high inflation and elevated interest rates on consumer demand.
The analyst from JPMorgan highlighted that the demand outlook for discretionary appliances likely remained under pressure in the second quarter. Additionally, the significant depreciation of the Brazilian real, which fell 12% against the US dollar during the quarter, is expected to have affected the company's growth.
In response to a slower anticipated recovery, JPMorgan has lowered its 2024/25 Adjusted EBIT (Earnings Before Interest and Taxes) forecasts for Electrolux by 4% and 2%, respectively.
For the second quarter, the firm projects revenues of SEK32.0 billion and an Adjusted EBIT of SEK18 million. This would mark a sequential improvement from the SEK720 million loss reported in the first quarter, attributed to the benefits of Electrolux's cost-savings initiatives.
The updated financial forecasts by JPMorgan come ahead of Electrolux's second-quarter results, which are scheduled to be reported on July 18. The adjustments reflect the market's anticipation of the company's near-term financial performance amid a challenging economic environment.
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