Stora Enso (Hold, TP: EUR16.00) - Current strength, mixed outlook
We believe strong demand across segments and continued positive price momentum should help Stora Enso to another strong quarter in Q3 (results due at 07:30 CET on 20 October). We are 5% above consensus on Q3e EBIT, mainly driven by Wood Products. In our view risks to the outlook have increased due to economic turbulence in China, as well as energy crisis-driven production outages hurting the region’s paper and board industry. We reiterate our HOLD but have trimmed our target price to EUR16 (17).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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