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 AB: 1 director

A director at Holmen AB bought 630 shares at 398.830SEK and the significance rating of the trade was 52/100. 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 trades by all the company's directors over the last two years clearly showi...

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...

Holmen (Buy, TP: SEK490.00) - Gimme shelter

In our view, the Q4 results showed the strength of the backward-integrated business model with own forests, which helping Holmen to mitigate the severe cost inflation for pulp wood. We believe the company is in good shape and continue to like the conservative but shareholder-friendly business strategy of prioritising cash distribution to shareholders. Due to our more positive view on the paper business, we have raised our 2023–2024e EBITDA by c5–10%. We have upgraded to BUY (HOLD) and increased ...

Northern Lights

Holmen - Initiation of coverage - Needs to branch out

Holmen (HOLMB SS, Hold) - Initiation of coverage - Needs to branch out (45 pages)

HOLMEN AB with less fundamental stars is reduced to Neutral

HOLMEN AB (SE), a company active in the Paper industry, loses a star(s) at the fundamental level and sees its general evaluation downgraded. The independent financial analyst theScreener just removed a fundamental star(s) for a 3 over 4-star rating. As such, market behaviour remains unchanged and is evaluated as moderately risky. theScreener believes that the loss of a star(s) merits downgrade to the general evaluation of the title, which passes to Neutral. As of the analysis date January 19, 20...

Ford Equity International Rating and Forecast Report

Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...