Billerud (Buy, TP: SEK130.00) - In a good place with excess cash
Despite escalating macroeconomic uncertainty, we remain convinced that Billerud has healthy pricing power in Europe and is in a good position to increase its capacity utilisation for its well-performing US business. Our 2025e earnings are largely unchanged, but due to FX (much stronger SEK) and a sharp reduction of free CO2 allowances from 2026, we have cut our 2026–2027e EBITDA by c8%. We continue to see an attractive investment case, as our forecasts translate into appealing multiples, while the balance sheet is heavily overcapitalised. We reiterate our BUY, but have cut our target price to SEK130 (152).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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