UPM Reports Weak 2Q on Deteriorating Paper and Energy Results; Shares Overvalued
No-moat UPM managed to increase EBIT 2% over 2016 in the second quarter, but the margin dropped 130 basis points on weak results in energy and paper. The quarter was also affected by high maintenance activity, which should dissipate in the third quarter. However, raw material costs are rising, which we expect to continue. Cost-reduction programs were not able to fully offset increases in raw material prices during the quarter. We increase our fair value estimate to EUR 15 from EUR 14.25 to accou...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.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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