Ence : Sharp improvement in scenario merits re-rating
We are upgrading our recommendation of Ence to Neutral ahead of the expected earnings upcycle following pulp price recovery (+c.20% in 2026) and the positive progress on the group’s pulp differentiation (from 30% of sales in 2025 to over 60% by 2030e) and cost efficiency initiatives (-6% normalised cash cost target 2025-27e) which will result in a more resilient earnings profile while the group fully develops its renewable energy platform. Our SOTP-derived target price of € 2.7 (in line with previous target price) implies 8.7x EV/ EBITDA 2027e and 10% normalised cash flow yield 2027e.Ence Energia Y Celulosa is engaged in the manufacture and commercialization of wood pulp and derivatives. Co. divides its activities into the following two business lines: Forest Division: Co. manages timberlands in South America and the Iberian Peninsula. Co. is involved in trading of wood, and supplies solid wood products including: plywood, sawn timber, parquet flooring and glued-edge paneling. Co. is involved in forest and environmental consulting. Pulp Division and Energy Production: Co. is engaged in the production of Eucalyptus globulus-based TCF and ECF paper pulp. Co. is also involved in the generation of electricity through biomass power producing plants.
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
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