Husqvarna AB (publ) (HUSQ-B.ST) | Investment Case

1. Company Snapshot

1.a. Company Description

Husqvarna AB (publ) produces and sells outdoor power products, watering products, and cutting and surface preparation equipment.It operates through three divisions: Husqvarna Forest & Garden, Gardena, and Husqvarna Construction.The Husqvarna Forest & Garden division offers handheld products, such as chainsaws, brush cutters, trimmers, and leaf blowers; wheeled products, such as front riders and zero-turn mowers; robotic lawn mowers; and accessories and spare parts.

The Gardena division provides watering systems; robotic mowers, trimmers, hedge cutters, and shrub shears; garden tools, such as secateurs, loppers, axes, and digging tools; and smart garden systems.The Husqvarna Construction division offers power cutters, light compaction and concrete placement equipment, floor grinding machines, dust and slurry solutions, diamond tools for construction and stone industries, floor saws, and demolition robots.The company sells its products and solutions to forestry, tree care, landscaping, commercial lawn, and garden services sectors, as well as home and garden owners, and light construction and stone industries primarily under the Husqvarna, Gardena, Orbit, Diamant Boart, Jonsered, Flymo, RedMax, Zenoah, and McCulloch brands through dealers and retailers.

It operates in Germany, France, Sweden, Austria, rest of Europe, the Asia/Pacific, Canada, the United States, Latin America, and internationally.Husqvarna AB (publ) was founded in 1689 and is headquartered in Stockholm, Sweden.

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1.b. Last Insights on HUSQ

Husqvarna AB's recent performance was driven by strategic cost savings, debt reduction, and growth in robotic lawnmowers. The company's Q4 2025 earnings call highlighted its resilience in a challenging quarter. Additionally, Husqvarna's partnership with the DP World Tour and the British Masters golf tournament likely boosted its brand visibility. The global lawn and garden equipment market is expected to grow, driven by demand for sustainable solutions and innovative technologies. Husqvarna's focus on electrification and automation positions it well for future growth.

1.c. Company Highlights

Last Price	43.89
Change Percentage	0.50%
Open	43.8
Previous Close	43.67
Market Cap ( Millions)	25095
Volume	55435
Year High	58.72
Year Low	40.62
M A 50	45.6
M A 200	48.8

FCF Yield	7.76%
Dividend Yield	2.28%
ROE	7.30%
Debt / Equity	59.18%
Net Debt / EBIDTA	279.57%
Price To Book	1.07
Price Earnings Ratio	14.17
Price To FCF	12.89
Price To sales	0.54
EV / EBITDA	8.53

2. Husqvarna's Q4 Results: A Mixed Bag with Margin Pressures

Husqvarna Group reported a 3% decline in Q4 sales, with a significant margin contraction from 8.2% to -11.3%. The EPS came in at -1.343, slightly worse than estimates of -1.30335. For the full year, revenue grew by 1% despite headwinds from FX and tariffs. The operating margin declined to 6.2% from 6.6% in the previous year. The company's cost savings program delivered SEK 745 million in savings, but was offset by price erosion, currency, and tariffs. As Glen Instone noted, "Last year was mixed, with organic sales growth of 1%."

Publication Date: Feb -11

                                    📋 Highlights
                                    Full-Year Organic Sales Growth:
                                                Husqvarna achieved 1% organic sales growth in 2025 despite FX and tariff headwinds, with the Forest & Garden division growing 3% and a 7.8% operating margin.
Q4 Margin Decline:
                                                Fourth-quarter operating margins fell sharply from 8.2% in 2024 to -11.3% in 2025 due to lower volume/mix and North American handheld demand weakness, though SEK 180 million in cost savings were realized.
Cost-Out Strategy:
                                                The company announced a SEK 4 billion cost efficiency program targeting SEK 800 million in 2026 savings, including SEK 1.5 billion in 2026 for non-recurring costs and a 20% product complexity reduction.
Dividend Increase:
                                                Husqvarna proposed a 2026 dividend of SEK 1.25 per share, aligning with a 40% payout ratio and maintaining its policy of paying out over 40% of net income.
Sustainability Progress:
                                                Emissions dropped 56% below 2015 levels by 2025, with 49% circular innovation adoption and 1% quarterly improvement, while net debt-to-EBITDA reduced to 2.1 from 2.5.

                                

Segment Performance

The Husqvarna Forest & Garden Division showed a 3% growth and an operating margin of 7.8%. The Gardena Division declined by 3% organically, but maintained a flat EBIT. The Construction Division had a growth of 2% in the fourth quarter, driven by strong growth in power cutters and aftermarket sales.

New Strategy and Cost Efficiency Program

Husqvarna is changing its strategy, focusing on cost efficiency and innovation. The company launched a new cost efficiency program, targeting SEK 4 billion in cost savings by 2030. This is expected to be driven by a complexity reduction of 20%, achieved by reducing the product range and simplifying the business.

Valuation and Outlook

With a P/E Ratio of 14.63 and an EV/EBITDA of 8.71, the market is pricing in a recovery. The company's guidance for 2026 expects a low single-digit price increase, with some pressure in residential robotics. Analysts estimate revenue growth at 2.4% for next year. The dividend yield of 2.21% is attractive, and the company's solid financial position, with a reduction in net debt, is a positive.

Sustainability and Cash Flow

Husqvarna has made progress in sustainability, improving emissions by 1% in Q4 and reducing emissions from the 2015 baseline by 56%. The company's cash flow profile for 2025 was normal, with SEK 3.3 billion in cash flow. The net debt-to-EBITDA ratio improved to 2.1 from 2.5 previously, indicating a strong financial position.

3. NewsRoom

Outdoor Power Equipment Global Outlook Report 2026: A $48.2 Billion Market by 2030 from $35 Billion in 2024 with Deere & Co., Husqvarna, HONDA, Stanley Black & Decker, and Toro Group Dominating

Feb -16

Source:

Lawn and Garden Equipment Global Industry Report 2025-2030 Featuring Toro, John Deere, Stanley Black and Decker, Husqvarna, Honda, Robert Bosch, Kubota, Makita, and Emak

Feb -05

Source:

Husqvarna AB (HSQVY) Q4 2025 Earnings Call Highlights: Navigating Challenges with Strategic ...

Feb -04

Source:

3 European Stocks That Could Be Undervalued By 33.2% To 41.5%

Jan -26

Source:

Assessing Husqvarna (OM:HUSQ B) Valuation After Mixed Returns And An Indicated 9% Discount

Jan -14

Source:

Is Husqvarna (OM:HUSQ B) Starting To Look Attractive After A Prolonged Share Price Slump

Jan -14

Source:

Husqvarna becomes Title Partner of the British Masters on the DP World Tour

Jan -13

Source:

$20+ Billion Electric Cordless Lawn & Garden Tools Market Outlook, 2032: Benchmarking Andreas Stihl, Husqvarna, The Toro Co., Techtronic Industries, Briggs & Stratton and Other Key Players

Dec -15

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.28%)

6. Segments

Husqvarna Forest & Garden

Expected Growth: 4.5%

Husqvarna Forest & Garden's 4.5% growth is driven by increasing demand for outdoor power equipment, particularly in the Americas, and a growing trend towards professionalization in the forestry and gardening industries. Additionally, the company's focus on innovation, digitalization, and sustainability initiatives contributes to its growth momentum.

Gardena

Expected Growth: 3.8%

Gardena's 3.8% growth is driven by increasing demand for outdoor power equipment, particularly in the European market. Husqvarna's strategic focus on innovation, sustainability, and digitalization has enhanced product offerings, improving customer experience. Expanding distribution channels, strong brand recognition, and a growing trend towards gardening and outdoor living also contribute to the segment's growth.

Husqvarna Construction

Expected Growth: 4.2%

Husqvarna Construction's 4.2% growth is driven by increasing demand for urbanization and infrastructure development, coupled with a growing need for efficient and sustainable construction solutions. The segment benefits from its strong brand reputation, innovative product offerings, and strategic acquisitions, enabling it to capitalize on emerging trends in the construction industry.

Group Common

Expected Growth: 3.5%

Husqvarna AB's Group Common segment, with a 3.5% growth rate, is driven by increasing demand for outdoor power equipment, particularly in the Asia-Pacific region. Additionally, the company's focus on innovation, digitalization, and sustainability initiatives, such as battery-powered products and robotic lawn mowers, contribute to its growth momentum.

7. Detailed Products

Chainsaws

Husqvarna's chainsaws are designed for professional forestry and tree care, as well as for homeowners who need to cut firewood or clear land.

Trimmers and Brushcutters

Husqvarna's trimmers and brushcutters are designed for lawn care and landscaping, providing efficient and easy trimming and cutting of grass and weeds.

Lawn Mowers

Husqvarna's lawn mowers are designed for homeowners and professionals, offering a range of walk-behind, ride-on, and robotic mowers for various lawn sizes and types.

Garden Tractors

Husqvarna's garden tractors are designed for homeowners with larger lawns, providing a range of attachments and accessories for lawn care and landscaping tasks.

Ride-on Mowers

Husqvarna's ride-on mowers are designed for professionals and homeowners with large lawns, offering a range of models with various features and attachments.

Zero-Turn Mowers

Husqvarna's zero-turn mowers are designed for professionals and homeowners with large lawns, offering high-speed mowing and maneuverability.

Automower Robotic Lawn Mowers

Husqvarna's Automower robotic lawn mowers are designed for homeowners, providing a convenient and efficient way to maintain lawns.

Battery Products

Husqvarna's battery products include chainsaws, trimmers, and blowers, designed for professionals and homeowners who need reliable and efficient battery-powered tools.

Construction Equipment

Husqvarna's construction equipment includes demolition robots, compaction equipment, and concrete cutting equipment, designed for professionals in the construction industry.

8. Husqvarna AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

Husqvarna's products are moderately substitutable with other brands, but the company's strong brand reputation and quality products reduce the threat of substitutes.

Bargaining Power Of Customers

Husqvarna's customers are fragmented and lack bargaining power, giving the company an upper hand in pricing and product offerings.

Bargaining Power Of Suppliers

Husqvarna's suppliers have some bargaining power due to the company's dependence on them for raw materials, but the company's large scale and diversified supply chain mitigate this threat.

Threat Of New Entrants

The outdoor power equipment industry has high barriers to entry, including significant capital requirements and established distribution networks, making it difficult for new entrants to compete with Husqvarna.

Intensity Of Rivalry

The outdoor power equipment industry is highly competitive, with several established players, including Husqvarna, Deere, and STIHL, competing for market share and customer loyalty.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	39.94%
Debt Cost	7.97%
Equity Weight	60.06%
Equity Cost	11.47%
WACC	10.07%
Leverage	66.51%

11. Quality Control: Husqvarna AB (publ) passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

SKF

A-Score: 5.7/10

Value: 4.3

Growth: 4.6

Quality: 5.2

Yield: 6.9

Momentum: 6.0

Volatility: 7.3

1-Year Total Return ->

DMG MORI

A-Score: 5.6/10

Value: 3.2

Growth: 2.4

Quality: 6.9

Yield: 3.8

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

SFS

A-Score: 5.1/10

Value: 4.6

Growth: 5.4

Quality: 6.5

Yield: 3.8

Momentum: 1.0

Volatility: 9.0

1-Year Total Return ->

Kongsberg Gruppen

A-Score: 4.3/10

Value: 1.3

Growth: 8.9

Quality: 8.0

Yield: 3.1

Momentum: 2.0

Volatility: 2.7

1-Year Total Return ->

Husqvarna

A-Score: 4.2/10

Value: 6.4

Growth: 3.9

Quality: 3.9

Yield: 4.4

Momentum: 1.5

Volatility: 5.0

1-Year Total Return ->

QinetiQ

A-Score: 4.0/10

Value: 5.2

Growth: 4.4

Quality: 1.9

Yield: 3.1

Momentum: 5.5

Volatility: 3.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

4.69%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.07%

Husqvarna AB (publ) - SE0001662230

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on HUSQ

1.c. Company Highlights

Stable Momentum

Average Quality

Average Yield

Earnings Miss

Revenues Beats

Lower Growth

Weak Momentum

Revenues Miss

Average Growth

Earnings Beats

Higher Yield

Lower Quality

2. Husqvarna's Q4 Results: A Mixed Bag with Margin Pressures

Segment Performance

New Strategy and Cost Efficiency Program

Valuation and Outlook

Sustainability and Cash Flow

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.28%)

6. Segments

Husqvarna Forest & Garden

Expected Growth: 4.5%

Gardena

Expected Growth: 3.8%

Husqvarna Construction

Expected Growth: 4.2%

Group Common

Expected Growth: 3.5%

7. Detailed Products

Chainsaws

Trimmers and Brushcutters

Lawn Mowers

Garden Tractors

Ride-on Mowers

Zero-Turn Mowers

Automower Robotic Lawn Mowers

Battery Products

Construction Equipment

8. Husqvarna AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Husqvarna AB (publ) passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

43.89$

Current Price

43.89$

Potential

12.e Scoring ^Insights

12.f DCF ^BETA