Pulp leads the way

A long list of price increases. Q1e EBIT up q-o-q: lower maintenance costs. Smart to buy when macro is low - and to find the best players LT.

Q1 preview

SCA will report its next quarterly results on 26 April. We reiterate BUY with a TP of SEK 175 (165). We estimate clean Q1'24e EBIT of ~SEK 960m.

In price hike mode

Q4 clean EBITDA -4%, EPS +32% above cons ensus. Early-cyclical share with large growth projects. Forest values up to SEK 153/sh, SOTP of SEK 180/sh.

Clean EBITDA 4% below

Two steps forward, one step back

Price hike efforts on early-cyclicals. Q4e EBIT down q-o-q, seasonality and prices. Finding the best players LT - smart to buy when macro is low.

Q4 preview

SCA will report its next quarterly results on 26 January. We reiterate BUY with a TP of SEK 165 (175). We estimate clean Q4'23e EBIT of SEK ~760m.

Early-cyclical share with growth projects

Q3 EBITDA in-line, Q4 likely slightly up q-o-q. Early-cyclical share with large growth projects. Forest values of SEK 141-160/sh, SOTP SEK 170-205/sh.

EBITDA +1%, EPS -2%

Trying to find a higher trough

Pulp and containerboard appear in better shape. Q3e EBIT flat q-o-q. Less destocking into Q4? Smart to buy when macro is low, valuation already down.

Q3 preview

SCA will report its next quarterly results on 27 October. We reiterate BUY with a TP of SEK 175 (155). We estimate clean Q3'23e EBIT of SEK ~900m.

Direction down for Q3, but with value support

Q2 EBITDA 2% below, Q3 likely down q-o-q. Early-cyclical prices have already dropped. Forest values of SEK 140/sh. SOTP SEK 170-200/share.

Q2 EBITDA 2 % below

Leading indicators for OECD industrial production

OECD: The indicator points up a bit from a low level. IP growth has dropped. US: The indicator points up a bit from a low level (housing starts, monetary policy, real FX). EU: The indicator points down (monetary policy, bond yields, real FX). Japan: The indicator is neutral (monetary policy vs hous

Pulp & Paper: Pulp down and wood up

Not a great combo for earnings. Paper needs capacity cuts. Q2e EBIT down q-o-q, lower prices, weak volumes. Valuation down, smart to buy when macro is low.

Q2 preview

We estimate clean Q2 EBIT of ~SEK 1,150m.For full assumptions see our newest sector report from 29 June: Pulp down and wood up.

Premium player at a discount

Q1 EBITDA +20%, sawn goods prices +5-10% in Q2. The direction is down for pulp and kraftliner. Forest values of SEK 140/sh. SOTP SEK 170-200/share.

EBITDA +20% above

Paper demand too weak for comfort

Pulp & Paper: Paper is the loser again, more capacity cuts needed. Q1e EBIT down q-o-q, lower volumes and prices. Valuation below normal, ATRoCE high.

Q1 preview

We reiterate BUY with a TP of SEK 150 (160). We estimate clean Q1 EBIT of ~SEK 1,175m. For full assumptions see our sector report from 13 April, Paper demand too weak for comfort.

Leading indicators for OECD industrial production

OECD: The indicator points down. US: The indicator points down (house prices, bond yields, monetary policy). EU: The indicator points down (monetary policy, bond yields). Japan: The indicator is neutral (housing starts, monetary policy).