Ence: Key takeaways from the results call: equity story is reinforced
Key takeaways from the conference call:
- Expect a longer rising cycle as pricing is robust
- Guidance for the 2017 EBITDA is upped +11%
- OWC will not drag cash flow in 2H17
- The recent share price weakness provides an opportunity to Buy
We will revise our estimates and valuation and probably update our target price of €3.80. The arguments used during the call reinforce Ence’s equity story that appeared to weaken under a cloudy scenario for pulp prices. As these clouds dissipate, the stock should outperform again.
Ence Energia Y Celulosa is engaged in the manufacture and commercialization of wood pulp and derivatives. Co. divides its activities into the following two business lines: Forest Division: Co. manages timberlands in South America and the Iberian Peninsula. Co. is involved in trading of wood, and supplies solid wood products including: plywood, sawn timber, parquet flooring and glued-edge paneling. Co. is involved in forest and environmental consulting. Pulp Division and Energy Production: Co. is engaged in the production of Eucalyptus globulus-based TCF and ECF paper pulp. Co. is also involved in the generation of electricity through biomass power producing plants.
Bankinter S.A. is a Spanish brokerage firm established in 1989. The company's line of business includes the provision of market research and trading services for Equity and Fixed Income products.
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