Investing.com — shares fell over 7% on Monday after BofA Global Research slashed its rating from “buy” to “underperform,” citing a perfect storm of weak consumer demand and surging logistics and raw material inflation.

The brokerage slashed its price objective for the Swedish home appliance manufacturer to 50 SEK from a previous target, as the stock traded at 62.82 SEK. 

Analysts now expect the company to face EBIT headwinds of 1 billion SEK in 2026 and 2 billion SEK in 2027, leading to a 16% to 26% reduction in group earnings estimates for those years.

Mounting pressures in the global supply chain are primary drivers for the downgrade. Logistics costs, which accounted for 8.6% of sales in fiscal 2025, are under pressure from a 30% increase in freight rates following conflict in the Middle East. 

BofA estimates that should these rates remain elevated, the company faces a 4 billion SEK annual EBIT headwind.

“Demand remains weak, but cost pressure mounting,” the report said, noting that risks of earnings downgrades have increased.

Beyond logistics, raw material prices have surged between 10% and 30% year-on-year. Specifically, a 30% inflation in plastics prices is estimated to result in a 1.3 billion SEK headwind. 

Prices for steel, , and aluminum have also moved higher, further straining margins as the company struggles to find volume growth.

The report noted that “the magnitude of recent cost inflation” has forced a methodology change in valuation. The new 50 SEK price objective implies the stock will trade at a 30% discount compared to its historical average, at approximately 6x EV/EBITDA for fiscal 2027.

While Electrolux has attempted to offset these costs through internal measures, the report indicated that the external environment has turned significantly more challenging than previously anticipated.