Metsa Board (Hold, TP: EUR8.00) - Volume pain, but pricing healthy
Metsa Board’s profits are under pressure due to weak Q2 volumes, which are likely to spill over to Q3, prompting us to cut our 2023e and 2024e EBITDA by c30% and c10%, respectively. However, it is encouraging that prices for its core products are holding up well, suggesting a strong earnings recovery once market volumes improve, likely at year-end in our opinion. Another positive is the company’s low inventories combined with its solid balance sheet. We reiterate our HOLD and EUR8 target price.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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