UPM's Biorefining Segment Recovers in 1Q; Shares Overvalued
After reviewing UPM’s first-quarter results, we are maintaining our no-moat rating and EUR 14.25 fair value estimate. UPM reported decent first-quarter results with EBIT increasing 8% over 2016, although lower depreciation contributed a good chunk of the gain. Volume growth was solid in most segments except energy, due to a mild winter, and the European and North American paper business, which is in structural decline. At current levels, we think the shares are overvalued.The market reacted fa...
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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