Last Update 31 Mar 26

HUSQ B: Higher Required Returns Will Shape Future Re Rating Potential

Analysts have trimmed their Husqvarna price target by SEK 5, with the updated SEK 47.75 level reflecting slightly higher required returns and a modestly adjusted longer term P/E assumption following recent research.

Analyst Commentary

Recent research around Husqvarna focuses on how the slightly lower SEK 47.75 price target lines up with the company’s earnings power, required returns, and execution risks.

Bullish Takeaways

Bullish analysts view the adjusted longer term P/E assumption as still supportive of Husqvarna’s ability to justify a valuation closer to sector peers if execution on profitability holds up.
The modest SEK 5 reduction in the target is seen as a fine tuning of required returns rather than a fundamental change in the long term equity story.
Some see room for upside if Husqvarna can maintain cost discipline and keep earnings quality consistent with the updated P/E framework used in the research.
For investors, the revised target is interpreted by bullish analysts as leaving a potential cushion for re rating if operational delivery tracks or exceeds current expectations.

Bearish Takeaways

Bearish analysts point to the higher required returns baked into the SEK 47.75 target as a signal that risk around execution and earnings visibility has risen versus prior assumptions.
The adjusted longer term P/E assumption is viewed as a reminder that Husqvarna may need stronger or more consistent results to support previous valuation levels.
Some are cautious that, with a lower target, there is less room for error on factors such as margins, cash generation, and capital allocation.
For more cautious investors, the new target underlines the importance of tracking how quickly management can address operational priorities that are embedded in the refreshed valuation work.

What's in the News

Husqvarna released its 2026 residential riding and zero turn mower lineup, featuring updated designs, comfort features such as upgraded suspension seats, and a range of tractor and zero turn models aimed at homeowners preparing for the Spring mowing season (Product related announcement).
The Board of Directors plans to propose a 2025 dividend of SEK 1.25 per share, to be paid in two installments of SEK 0.50 and SEK 0.75 per share, with planned record dates in April and October 2026, subject to approval at the AGM (Dividend proposal).
Husqvarna announced that Chief Financial Officer Terry Burke intends to leave the role no later than July 31, 2026. Following this, he is expected to remain in an advisory capacity until year end while the company searches for a successor (Executive change).
The company signed a multi year agreement to become Title Partner of the 2026 Husqvarna British Masters at The Belfry and official robotic mowing partner of the DP World Tour. The agreement also includes broader partnership roles across several European tournaments where Husqvarna plans to showcase its product range (Client announcement).

Valuation Changes

Fair Value: SEK 47.75 is unchanged. This indicates the updated work keeps the same central value estimate for the shares.
Discount Rate: Risen slightly from 7.79% to 7.91%. This reflects a marginally higher required return applied in the model.
Revenue Growth: Kept effectively flat at around 39.40%. The updated assumptions do not alter the growth outlook used in this valuation.
Net Profit Margin: Remains broadly stable at around 5.52%, with only a very small numerical adjustment in the model inputs.
Future P/E: Edged up from 13.12x to 13.17x. This implies a slightly higher multiple applied to future earnings in the updated work.

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Key Takeaways

Leadership in robotics and sustainable equipment, supported by innovation, is driving rapid market share gains and recurring revenue opportunities in both professional and consumer segments.
Portfolio optimization and focus on high-growth, high-margin categories are improving capital efficiency and underpinning sustained earnings growth.
Increased competition and weak market conditions are putting pressure on margins, sales growth, and profitability, especially in robotics and North American markets.

Catalysts

About Husqvarna

Produces and sells outdoor power products, watering products, and lawn care power equipment.What are the underlying business or industry changes driving this perspective?

The accelerating transition towards battery-powered, electric, and especially robotic outdoor equipment is expanding Husqvarna's addressable market and supporting double-digit sales growth in robotics and electrified categories, which is expected to drive above-average revenue growth and higher net margins as a greater share of sales comes from higher-ASP, lower-servicing products.
Growing environmental consciousness and tightening emissions regulations are pushing professional and municipal customers to adopt sustainable solutions-an area where Husqvarna continues to lead through innovation, resulting in rapid market share gains in pro robotic mowers and watering products, likely translating into recurring revenue and improved earnings quality.
Ongoing urban development and the increasing need for professional landscaping are broadening the commercial side of Husqvarna's business (proportion of professional revenue now at 35%), positioning the company to benefit from urban/municipality infrastructure investments and bolstering long-term revenue visibility.
The company's emphasis on robotics and 'smart' connected solutions-including expansion into new use cases (e.g., golf, sports arenas, public spaces, and IoT watering systems)-supports new recurring after-sales income opportunities and fosters long-term customer loyalty, enhancing both revenue growth potential and net margins.
Active portfolio optimization (focusing on higher-growth, margin-accretive categories and reducing inventory/net debt) is increasing capital efficiency and improving return on invested capital (ROIC), setting up Husqvarna for stronger long-term earnings growth.

Husqvarna Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Husqvarna's revenue will remain fairly flat over the next 3 years.
Analysts assume that profit margins will increase from 3.8% today to 5.5% in 3 years time.
Analysts expect earnings to reach SEK 2.6 billion (and earnings per share of SEK 4.55) by about March 2029, up from SEK 1.8 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting SEK3.0 billion in earnings, and the most bearish expecting SEK2.2 billion.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 13.2x on those 2029 earnings, up from 11.9x today. This future PE is lower than the current PE for the GB Machinery industry at 23.2x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.91%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

Intensifying competition from low-cost Asian manufacturers, especially in the entry and mid-range robotics segments, is contributing to aggressive price pressure, resulting in price reductions and negative price impacts (e.g., SEK 160 million negative in Q2 from robotics pricing), which can erode net margins and profitability over time.
Persistent weak market conditions in North America across all divisions, driven by macroeconomic uncertainty and lower consumer demand, have led to declining sales in the region and heightened revenue volatility, particularly as North America remains a significant end market for Husqvarna.
Increasing global tariffs and currency headwinds (SEK 225 million negative in the first half of 2025 from currency and tariffs combined) create ongoing upward cost pressure and could require further price hikes or margin sacrifices, impacting earnings and possibly constraining future growth investments.
Growing market share of robotics products notwithstanding, Husqvarna's organic sales growth sometimes lags overall market growth in mid
and entry-level robotic mower segments, possibly leading to gradual market share erosion and slower revenue momentum if not addressed.
Sustained margin pressure in the entry-level segment due to low profitability and the need to maintain innovation investments to keep up with technological shifts (e.g., vision/LiDAR navigation) increases the risk of negative returns on R&D outlays in this segment, affecting long-term earnings quality.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of SEK47.75 for Husqvarna based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SEK60.0, and the most bearish reporting a price target of just SEK42.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be SEK47.2 billion, earnings will come to SEK2.6 billion, and it would be trading on a PE ratio of 13.2x, assuming you use a discount rate of 7.9%.
Given the current share price of SEK36.79, the analyst price target of SEK47.75 is 23.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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