Stora Enso (Buy, TP: EUR16.00) - There is a new sheriff in town
In September 2023, Hans Sohlström took over as CEO, with a stated ambition of creating shareholder value through: 1) asset divestments; 2) reduced opex; and 3) lowered NWC. After scrutinising the self-help opportunities, we see potential for a capital release of more than EUR2bn, translating into meaningfully lower 2025–2026e EV/EBIT multiples, together with a c1% better over-the-cycle ROCE. Coupled with improved market prospects for pulp and packaging, spurring earnings growth, we have raised our target price to EUR16 (14) and reiterate our BUY.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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