DnB Markets - Svenska Cellulosa Aktiebolaget Class B (SCA B) SCA (Buy, TP: SEK185.00) - Earnings resilience and leverage

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DnB Markets

Johannes Grunselius

EUR 463.27 For Business Accounts Only

SCA (Buy, TP: SEK185.00) - Earnings resilience and leverage

Due to its integrated business model, good access to relatively cheap wood, well-invested industry assets and tailwind from completed growth investments, we believe SCA is positioned to outclass its peers on earnings. Given improving prices for containerboard and pulp but also a weaker SEK, we expect 2024 EBITDA to grow 42% YOY to close to SEK10bn. We believe 2024e consensus is much too cautious, and see significant valuation upside potential and an attractive investment case. We reiterate our BUY and SEK185 target price.

29/08/2023 1 EN

Underlying

Svenska Cellulosa Aktiebolaget Class B

Svenska Cellulosa is a holding company. Through its subsidiaries, Co. is a global consumer goods and paper company that develops, produces and markets personal care products, tissue, publication papers and solid-wood products. Co. consists of three business areas - Personal Care, Tissue and Forest Products. Personal Care activities comprise three product segments: incontinence products, baby diapers and feminine hygiene products. Co.'s Tissue product portfolio comprises toilet paper, kitchen rolls, facial tissues, handkerchiefs and napkins. Co.'s Forest Products offers publication papers, kraftliner (packaging papers), pulp, solid-wood products and renewable energy.

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SE0000112724 Nasdaq Nordic Stockholm Sweden

Provider

DnB Markets

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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Analysts

Johannes Grunselius

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SCA (Buy, TP: SEK185.00) - Earnings resilience and leverage

More price hikes

SCA (Buy, TP: SEK190.00) - Earnings growth is on

SCA (Buy, TP: SEK185.00) - From headwinds to tailwinds

Danske Bank (Buy, TP: DKK235.00) - Distributions slow, but approaching

Orkla (Hold, TP: NOK81.00) - Signs of light

Seafood - Fat Trout Weekly

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