Stora Enso (Buy, TP: EUR13.00) - Value over volume
Q1 was better than feared, with macro weakness visible in deliveries but good pricing and active mix management compensating for lost volumes. Biomaterials fared better than expected as the fall in benchmark pulp prices had only a limited impact on the niche pulp portfolio. Consumer Board is slowly moving in the right direction, but the real step-up should be seen in 2020, as key liquid packaging contracts roll over and group-wide cost savings bear fruit. We have raised our 2019–2021e EBIT adj. slightly, and we reiterate our BUY and EUR13 target price.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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