Stora Enso (Buy, TP: EUR17.00) - All eyes on potential forest sales
We have cut our 2024e EBITDA by c9% on lower price assumptions for pulp, but our 2025–2026e is largely unchanged. Given the economic significance of the decision to divest 12% of the Swedish forestland, the outcome should overshadow the usual businesses. Due to three key reasons, we believe Stora Enso should be able to sell its forestland at book value or at a premium, which would crystallise significant values and be supportive of the stock. We reiterate our BUY and have raised our target price to EUR17 (16.5).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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