UBS cuts Orkla to 'sell' as cost inflation, Iran war weigh on margins

Orkla ASA

29/05/2026 11:23

** UBS downgrades Norwegian consumer goods company Orkla ORK.OL to "sell" from "neutral" due to mounting pressures from cost inflation and the Middle East conflict
** The brokerage warns the market may be underestimating margin headwinds, saying that pricing is a weaker lever now because "the consumer is much weaker"
** It cuts Orkla's PT by 32% to NOK 89, vs Thursday's closing price of NOK 103, forecasting a drop in near-term margins due to added costs from factory closures and inflation in freight, packaging and energy
** UBS expects net profit contributions from Orkla's associate company Jotun to contract by 14% in 2026 and by 6% in 2027 as the Middle East turmoil raises costs
** It also points to a demanding valuation alongside weaker organic sales growth estimates
** Out of nine analysts that cover Orkla, one rates the stock "buy", seven "hold" and one "strong sell", according to LSEG data
** Orkla shares fall around 3% by midday local time

(Reporting by Marta Frackowiak)
((marta.frackowiak@thomsonreuters.com))