Mayr-Melnhof confirmed at BUY, TP EUR 194 - Working through a transition year
We maintain the BUY recommendation for Mayr-Melnhof but lower the target price to EUR 194 from EUR 210 as we have factored in the earnings pressure arising from input pricesWe deem FY 21 a transition year, shaped by input cost inflation, restructuring and the beginning M&A integration
MM Group should be able to restore earnings and thus also dividend growth as of next year
Investments in new capacities should allow tangible volume growth going forward. A stabilisation of major cost items (foremost waste paper) is key for selling price hikes effectively reversing the margin erosion
Mayr-Melnhof Karton and its subsidiaries are primarily engaged in manufacturing and selling cartonboard and folding cartons with a focus on Europe. Co.'s business segments include: Mayr-Melnhof Karton, which is engaged in the manufactures and markets numerous grades of cartonboard, concentrating on coated cartonboard produced predominantly from recovered paper as well as virgin fiber-based cartonboard; and Mayr-Melnhof Packaging, which is engaged in converts cartonboard into industrial printed folding cartons mainly for the food industry, other consumer goods industries, and into cigarette packaging as well as confectionary packaging.
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