Holmen AB: 5 directors

Three Directors at Holmen AB sold after exercising options/bought/maiden bought 4,777 shares at between 412.000SEK and 416.500SEK. The significance rating of the trade was 75/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trad...

Holmen (Hold, TP: SEK440.00) - Limited upside/downside potential

There were no real surprises in the Q4 results, and our 2025–2026e earnings are largely unchanged. We continue to like the stability offered by the integrated business model with its own forests, but at the same time struggle to see any real earnings improvement in H1. We reiterate our HOLD and SEK440 target price, and see a better risk/reward elsewhere in the sector.

Holmen (Hold, TP: SEK440.00) - Better earnings tailwind elsewhere

Once again, we have cut our 2024–2026 forecasts on lower electricity prices and a more cautious view on the earnings recovery for the depressed wood product division. We continue to believe Holmen is in good shape, and like its shareholder-friendly strategy of prioritising cash distribution through dividends coupled with buybacks. Still, given our forecast of relatively weak earnings momentum in 2025 and low upside potential to our SOTP valuation, we see better risk/reward elsewhere in the fores...

Holmen (Hold, TP: SEK460.00) - Robust earnings resilience

Due to better pricing and volumes in the Board & Paper division, Holmen’s Q3 earnings beat our expectations. Weak demand and a weak pricing outlook for wood products, board and publication paper are partly mitigated by earnings stability in the forest business, and we still like the integrated business model with own forestland. We have made relatively small changes to our 2024–2026e earnings and we reiterate our HOLD and SEK460 target price.

Holmen (Hold, TP: SEK460.00) - Earnings stability intact

We have trimmed our 2024–2026 forecasts on electricity prices and lower assumptions for traditional paper. However, we expect investors’ perception about the value of Holmen’s forestland to turn gradually more positive, due to improved earnings prospects for forest owners. We reiterate our HOLD but have raised our target price to SEK460 (455).

Holmen (Hold, TP: SEK455.00) - Lowered risk and buybacks restart

Although our earnings estimates are largely unchanged, we see less forecast risk following the overall solid Q2 report that showed good mix and volumes for the board and paper division. In addition, with our SOTP indicating a value of SEK530/share, we find it positive that Holmen intends to reinitiate buybacks. We reiterate our HOLD but have increased our target price to SEK455 (430).

Holmen (Hold, TP: SEK430.00) - Headwind from lower power prices

Due to falling electricity prices hitting profits from the spot-exposed renewable energy business and recent signals from peers of lower sequential earnings for wood products for Q3, we have cut our 2024e EBITDA by 4%. We believe Holmen is in good shape, and like its shareholder-friendly strategy of prioritising cash distribution. Still, given our view of weak earnings momentum near-term, we see much better risk/reward elsewhere in the forestry sector. We reiterate our HOLD but have cut our targ...

Holmen (Hold, TP: SEK450.00) - In good control

Due to better-than-expected volumes for the board and paper division and stronger than expected earnings for the forestry operations, Q1 earnings were above our forecast. Thanks to the unique business model with close to 50% backward integration in its own wood, Holmen has unique cost control and, as we also believe the business cycles for its industries are at cyclical troughs, we have turned less negative on the stock. Still, due to a rich valuation, we do not see meaningful upside potential a...

Holmen (Sell, TP: SEK370.00) - Weak earnings momentum

We consider Holmen a quality company and continue to like its shareholder-friendly strategy. However, as c50% of the 2023 EBIT was derived from the traditional paper business (for which addressable markets are shrinking), and with still-tough markets for the paperboard business and lower spot prices for electricity affecting the renewable power business, we expect earnings to decline for 2024. Given relatively rich earnings multiples, we reiterate our SELL and SEK370 target price.

Holmen (Sell, TP: SEK370.00) - Challenging outlook for industries

Due to weaker prices and volumes for the paperboard business, Q4 earnings were below our expectations. Reflecting a more conservative view on paperboard, we have made small negative changes to our 2024 group forecasts. We still consider Holmen in good shape and like its conservative yet shareholder-friendly strategy of prioritising cash distributions. However, expecting weak earnings momentum in 2024 and in light of generous valuation multiples, we reiterate our SELL and SEK370 target price.

Holmen (Sell, TP: SEK370.00) - Priced for perfection

We consider Holmen a quality company and continue to like its conservative yet shareholder-friendly strategy. However, as c.50% of our 2023e EBIT is from the traditional paper business, for which addressable markets are shrinking, and no immediate signs of improvement for paperboard and sawn wood, we expect earnings to decline in 2024 and thus find the valuation multiples unwarranted. We reiterate our SELL and have reduced our target price to SEK370 (376).

Holmen (Sell, TP: SEK376.00) - Valuation remains too rich

Valuation remains too rich Thanks to impressive earnings margins for the publication paper business Holmen’s Q3 results beat our expectations. We have made only small changes to our 2024 group forecasts, as our slightly increased divisional estimate for Paper is virtually offset by our slightly lowered forecast for Wood. We still consider Holmen to be in good shape, and continue to like its conservative yet shareholder-friendly strategy of prioritising cash distributions. However, as we see weak...

Northern Lights

Holmen (Sell, TP: SEK380.00) - Weak markets taking a toll

Due to Holmen’s backward-integrated business model with its own forest facilitating competitive wood sourcing, Q2 earnings were far stronger than most peers. Although we believe the integrated business model is likely to continue supporting earnings, Paper and Energy are facing price pressure. As we see weak earnings momentum, a rich valuation on our 2023–2024 estimates and a lack of positive catalysts, we reiterate our SELL and have cut our target price to SEK380 (390).

Northern Lights

Holmen (Sell, TP: SEK390.00) - Headwind from lower power prices

Due to falling electricity prices hitting profits from the spot-exposed renewable energy business and recent signals from peers of no pent-up demand for carton board and publication paper until Q4e, we have cut our 2023e EBIT by another 10%. We believe Holmen is in good shape, and still like its conservative but shareholder-friendly strategy of prioritising cash distributions. Nonetheless, given our view of very weak earnings momentum in the coming quarters and relatively high earnings risk, we ...

Northern Lights

Holmen (Hold, TP: SEK460.00) - More challenging 2023e outlook

Due to signs of weaker paper prices and a lack of pent-up demand for carton board and publication paper in Q2, we have cut our 2023e EBITDA by 6%. We believe Holmen is in good shape and continue to like its conservative but shareholder-friendly business strategy of prioritising cash distribution to shareholders. From 2024e, the company should start to benefit from a weaker SEK, but due to likely soft earnings momentum for the next few quarters, we have downgraded to HOLD (BUY) and lowered our ta...

Holmen (Buy, TP: SEK470.00) - Keeping up a high profit level

The Q1 report was largely in line with our expectations and we have made few forecast changes. Looking ahead, Holmen faces price pressure for Paper and Paperboard but, due to its backward-integrated business model, should be far less affected by higher wood costs than others and thus able to report healthy earnings. Also, we appreciate the shareholder-friendly strategy of prioritising cash distributions to shareholders. We reiterate our BUY and SEK470 target price.

Holmen (Buy, TP: SEK470.00) - Standing on firm ground

Holmen has traded lower lately, likely on concerns about falling prices across its industries. However, given the intrinsic value in the asset portfolio being heavily tilted to forestland, we find this weakness unfounded. We have made relatively small negative changes to our earnings scenario, and we continue to believe that Holmen is in good shape. In addition, we appreciate the conservative but shareholder-friendly business strategy of prioritising cash distributions to shareholders. We reiter...