Essity AB Faces Downgrade Amid Private Label Pressure
Stockholm, July 15, 2025 — Barclays has downgraded Essity AB’s stock rating to “Underweight” from “Neutral,” citing pressure from private label products. This decision has led to a reduction in the target price for Essity’s shares from SEK 290 to SEK 230. The downgrade comes as Essity, a leading global player in the consumer staples industry, faces challenges in its personal care, consumer tissue, and professional hygiene products sectors.
Key Details:
Stock Performance: Essity’s shares closed at SEK 263.40 on the previous trading day. The downgrade reflects concerns over the company’s ability to compete with private label products, which are often priced lower than branded goods.
Market Reaction: The downgrade by Barclays is echoed by other financial institutions, with DNB Carnegie and Pareto also lowering their recommendations for Essity. This collective sentiment has contributed to a negative outlook for the company’s stock in the short term.
Company Overview: Essity AB, headquartered in Stockholm, Sweden, is a prominent name in the household products industry. The company offers a diverse range of products, including incontinence products, baby care items, wound care solutions, and hygiene products. Its well-known brands include TENA, TORK, and Zewa, among others.
Recent Developments: In addition to the downgrade, Essity has been actively managing its share structure. During the week of July 28, 2025, the company repurchased approximately 345,581 of its own Class B shares as part of a SEK 3 billion buyback program.
Industry Context: Essity operates in a competitive market, with rivals such as Kimberly-Clark also facing similar pressures. However, some competitors like GE Aerospace have seen positive performance, with a 2.7% increase in their stock value.
The downgrade by Barclays highlights the challenges Essity faces in maintaining its market position amidst growing competition from private label products. Investors and stakeholders will be closely monitoring the company’s strategies to address these challenges and improve its market performance.