Stora Enso (Buy, TP: EUR14.00) - A value and self-help story
Despite the still-weak market outlook for 2024, we find good reason to turn more optimistic. Earnings expectations remain depressed and the balance sheet is healthy. We expect positive structural changes in 2024, with the new CEO in place, including a sale of the Chinese operations. We forecast a high dividend to be maintained for 2023, which is likely to be interpreted as a positive sign for profit throughout the cycle. With solid belief in the value story, we have upgraded the stock to BUY (HOLD) and raise our target price to EUR14 (12).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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