Billerud (Buy, TP: SEK126.00) - In good shape
The Q4 report demonstrates that Billerud is in good shape and is able to generate healthy earnings and cash flow in challenging markets. On a positive note, management indicates better markets for 2024e, a view that we share as we believe the painful inventory restocking phase is largely done for most of Billerud’s clients. Reflecting a slightly more cautious view on prices and volumes, particularly for North America, we have made large cuts to our 2025–2026e. Still, our earnings scenario remains optimistic and translates into attractive valuation multiples, and we believe a lot of earnings risk has been reduced following the Q4 report. We reiterate our BUY and SEK126 target price.Billerud Korsnas Aktiebolag Public is a provider of packaging products and services. Co. has three business areas: Packaging Paper, which provides kraft and sack paper, as well as functional solutions for several applications, including packaging for foodstuffs, industrial purposes, medical applications and carrier bags, and also sells surplus of pulp that Co. does not use in its own production; Consumer Board, which develops and markets cartonboard used in packaging for beverages, yoghurt, refrigerated and frozen food products and other consumer goods; and Containerboard, which provides corrugated board raw material that provides packaging for transportation uses and primary packaging.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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