Marimekko - Upgrade to BUY
Marimekko elaborated the details of its revised strategy in its CMD and increased its targets to a more ambitious level. We left our estimates broadly intact with the uncertain market restricting future visibility. With the declined stock price, Marimekko’s valuation seems quite attractive, and we raise our rating to BUY (HOLD) but adjust TP to EUR 12.0 (13.2) reflecting the uncertain market environment.
Long-term targets were raised
In its capital markets day, Marimekko introduced its revised strategy for the period of 2023-27 and opened drivers for its updated long-term financial targets. The company aims for an annual net sales growth of 15% (prev. 10%) and a comparable operating profit of 20% (prev. 15%). Net debt to EBITDA ratio of max. 2x and yearly dividends of 50% of net earnings were left intact. We see the growth target as somewhat ambitious, especially during uncertain times that the western economies are currently facing. Meanwhile, we believe that the margin target is within a reach with the topline growth continuing and investments in efficiency.
Five success factors for scalable growth
The success of Marimekko’s strategy is based on five different pillars of which several relies on megatrends. The company emphasizes sustainability, a creative vision to obtain a wider audience, accelerating growth in Asia, love for the Marimekko brand and people, and end-to-end digitality to boost omnichannel growth and efficiency in order to achieve its ambitious targets. We see that Marimekko is well positioned in sustainability which is an ever-increasing trend in lifestyle products. Moreover, Marimekko’s strong brand supports the demand for Marimekko products even during uncertain times.
BUY with a TP of EUR 12.0
With the recent decline in Marimekko’s stock price, we see the company’s current valuation as quite attractive and upgrade our rating to BUY (prev. HOLD). However, with the uncertainty concerning the market environment and our estimates, we lower our TP to EUR 12.0 (prev. 13.2).
In its capital markets day, Marimekko introduced its revised strategy for the period of 2023-27 and opened drivers for its updated long-term financial targets. The company aims for an annual net sales growth of 15% (prev. 10%) and a comparable operating profit of 20% (prev. 15%). Net debt to EBITDA ratio of max. 2x and yearly dividends of 50% of net earnings were left intact. We see the growth target as somewhat ambitious, especially during uncertain times that the western economies are currently facing. Meanwhile, we believe that the margin target is within a reach with the topline growth continuing and investments in efficiency.
Five success factors for scalable growth
The success of Marimekko’s strategy is based on five different pillars of which several relies on megatrends. The company emphasizes sustainability, a creative vision to obtain a wider audience, accelerating growth in Asia, love for the Marimekko brand and people, and end-to-end digitality to boost omnichannel growth and efficiency in order to achieve its ambitious targets. We see that Marimekko is well positioned in sustainability which is an ever-increasing trend in lifestyle products. Moreover, Marimekko’s strong brand supports the demand for Marimekko products even during uncertain times.
BUY with a TP of EUR 12.0
With the recent decline in Marimekko’s stock price, we see the company’s current valuation as quite attractive and upgrade our rating to BUY (prev. HOLD). However, with the uncertainty concerning the market environment and our estimates, we lower our TP to EUR 12.0 (prev. 13.2).