Norske Skog (Hold, TP: NOK22.00) - Market headwinds take their toll
Due to an unfavourable combination of falling European test-liner prices, continued wood price pressure and reduced free CO2 allowances from January 2026, we have cut our 2025–2026e EBITDA by 7–21%. While this raises concerns about the elevated debt level, our conviction in the transformational story remains, and we believe Norske Skog’s mills in paper and packaging are competitive and offer low production costs. We have downgraded to HOLD (BUY) and cut our target price to NOK22 (32).Norske Skog ASA is a Norway-based company engaged in the paper industry. The Company manufactures, distributes and sells publication paper and pulp, including long and short fiber sulphate pulp, newsprint, magazine and bleached kraft paper, and particle boards. Its business activities are divided into two operating segments: publication paper Europe and publication paper Australasia. The publication paper Europe segment includes production and sale of newsprint and magazine paper in Europe. The publication paper Australasia segment includes production and sale of newsprint and magazine paper in Australasia. It owns and operates paper mills in Norway, France, Austria, Australia and New Zealand.
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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