Stora Enso (Buy, TP: EUR12.00) - Back to growth in 2020e
We expect Stora Enso’s Q2 results (due 19 July at 08.30 CET) to reflect the weakened near-term earnings outlook for containerboard and pulp, and we have cut our 2019–2021 EBIT forecasts by 7–10%. We do not materially differ from consensus on Q2 or 2019, but see a return to growth from 2020e onwards on the back of: 1) a Consumer Board recovery, and 2) Oulu conversion thereafter. Following our estimate cuts, we have cut our target price to EUR12 (13), and reiterate our BUY given our above-consensus EBIT forecasts for 2020–2021e and undemanding valuation.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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