Metsa Board (Buy, TP: EUR14.00) - Pricing power and FX tailwind
Although input costs are rising, we expect this to be more than offset by higher prices and FX tailwinds from USD/SEK and EUR/SEK. As we also foresee limited costs for planned stoppages in Q4, we expect Q4 earnings to reach a record high. Primarily reflecting new FX assumptions, we have increased our 2023e EBITDA by 13%, leading us to believe that next year is set to be much stronger than expected by the market. We reiterate our BUY and target price of EUR14.Metsa Board is a European producer of folding boxboard and white fresh forest fibre linerboard and a market pulp supplier. Co. and its subsidiaries comprise a forest industry group, which operations are organized into two business segments: Cartonboard and Lineboard and Paper. The Cartonboard business area is a manufacturer of folding boxboards. The business area also provides packaging services in Asia. The Linerboard and Paper business area is a manufacturer of coated white fresh forest fibre linerboards and producer of uncoated fresh forest fibre linerboards. The Linerboard and Paper business area also manufactures uncoated fine papers mainly for office end-use as well as coated papers.
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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