UPM (Buy, TP: EUR38.00) - Harvesting time
We have cut our 2025e EBITDA by c6% on more cautious volume assumptions, but largely maintained 2026–2027e. Still, our forecasts remain optimistic and translate into appealing valuation multiples. Given the Q4 progress and outlook comments on the instrumental Paso de Los Toro pulp mill, we believe ample forecast risk has been reduced. We are also encouraged by the EUR160m share buyback programme, to be followed by further buybacks. We reiterate our BUY, but have reduced our target price to EUR38 (40).UPM-Kymmene is a global paper and forest products group, mainly engaged in the production of paper, with an emphasis on the manufacture and sale of printing and writing papers. Co.'s operations comprise of these segments: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Paper Asia, UPM Paper ENA, UPM Plywood and Other. UPM Biocomposites, UPM Biochemicals business units and Group services are reported in Other operations. Co.'s activities are centred in European Union countries, North and South America and Asia with production plants in 13 countries.
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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