Barclays upgrades Huhtamaki as volume pressures ease

Huhtamaki Oyj

21/06/2024 13:19

** Barclays upgrades Finnish packaging maker Huhtamaki
 HUH1V.HE  to "overweight" from "equal weight", saying cost
savings and growing volumes could boost the shares after three
years of underperformance
    ** The weak performance has been driven by costly M&A and
recent boycotts against Huhtamaki's clients, such as fast food
chains, due to the Middle East conflict, Barclays says
    ** But with inflation cooling, prices stabilising and fast
food chains ramping up promotions, it expects packaging volumes
to increase going forward
    ** Huhtamaki is also in a prime position to benefit from the
growing focus on sustainability, the broker says
    ** It expects the effects of Huhtamaki's EUR 100 mln ($107
mln) cost savings programme to start to materialise soon,
boosting margins
    ** It says the company's long-term targets seem achievable,
echoing similar comments from Citi on Thursday
    ** Barclays raises PT by 10% to EUR 44 vs Thursday's closing
price of EUR 37.72
($1 = 0.9361 euros)

 (Reporting by Tilla Sjaavaag)
 ((tilla.sjaavaag@thomsonreuters.com))