Solid Execution for AkzoNobel in Fourth Quarter; Shares Undervalued

Narrow-moat AkzoNobel reported fourth-quarter EBIT of EUR 209 million, down 29% over 2020 but broadly in line with Vara consensus. Raw material Inflation (less than 30% in the quarter) and supply chain issues continue to be a major drag but AkzoNobel is executing well with continued price increases, including 12.5% in the fourth quarter and 14% in December. We don’t expect to make a material change to our EUR 107 fair value estimate. At current levels, the shares look undervalued.