AkzoNobel Earnings: In-Line Results and Sequential EBIT Margin Improvement; Shares Cheap

Narrow-moat AkzoNobel reported third-quarter 2023 adjusted EBITDA of EUR 414 million, broadly in line with the Visible Alpha consensus of EUR 412 million. Management narrowed down the full-year 2023 adjusted EBITDA guidance to a target of EUR 1.45 billion, from a range of EUR 1.4 billion to EUR 1.55 billion previously. This is slightly below the midpoint of the range and the EUR 1.5 billion in our forecast, but we expect the short-term negative impact to be largely offset by a time value of money adjustment in our model. We confirm our EUR 88 fair value estimate. The market reacted negatively to what can be interpreted as a guidance downgrade, sending shares around 4% lower during the day and making the discount to our fair value even more attractive, at around 35%.