Stora Enso (Buy, TP: EUR13.00) - Value story with a potential catalyst
Due to surprisingly weak Q4 earnings for the packaging materials division and overall muted outlook comments for all of Stora Enso’s industries, we were disappointed by the Q4 results that have prompted us to reduce our 2025–2026e EBIT by 19–6%. Despite this, we still find the valuation discount too high, especially as the company looks set to sell 12% of its Swedish forestland at a premium to book value. We reiterate our BUY, but have reduced our target price to EUR13 (14).Stora Enso is a provider of renewable solutions in packaging, biomaterials, wooden constructions and paper on global markets. Co.'s reporting segments are: Consumer Board, which develops and provides consumer packaging boards for printing and packaging applications; Packaging Solutions, which develops fibre-based packaging; Biomaterials, which provides a variety of pulp grades for paper, board, tissue, textile and hygiene product producers; Wood Products, which provides wood-based solutions for building and housing; Paper, which provides paper solutions for print media and office use; as well as Other, which includes Co.'s shareholding in the energy company, Pohjolan Voima.
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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