Jefferies starts AAK at 'hold', sees earnings risk priced in

** Jefferies initiates plant-based oils and fats maker AAK AAK.ST at "hold" with a PT of SEK 170 as weak volume and pricing pressure weigh on near-term earnings

** The brokerage says elevated raw material costs and high animal fat availability erode the cost competitiveness of the company's plant-based fats

** Still, it notes that despite a "slippery earnings trajectory" putting medium-term targets at risk, these headwinds are already reflected in current valuation

** The broker adds a re-rating would require volume momentum and the stabilisation of pricing pressure alongside an increase in the speciality portfolio

** Future acquisitions could also support a re-rating as the company's balance sheet could support SEK 7 billion of merger and acquisition firepower, it adds

** Out of ten analysts that cover the stock, five rate it "strong buy" or "buy", two rate "hold", and three rate "sell", according to LSEG data