Two negatives and one positive

Q1 preview

Billerud (Buy, TP: SEK130.00) - In a good place with excess cash

Despite escalating macroeconomic uncertainty, we remain convinced that Billerud has healthy pricing power in Europe and is in a good position to increase its capacity utilisation for its well-performing US business. Our 2025e earnings are largely unchanged, but due to FX (much stronger SEK) and a sharp reduction of free CO2 allowances from 2026, we have cut our 2026–2027e EBITDA by c8%. We continue to see an attractive investment case, as our forecasts translate into appealing multiples, while t...

Feb: Pulp shipments +0.3% y-o-y

January: Pulp shipments +6.2% y-o-y

Billerud AB: 1 director

A director at Billerud AB bought 4,545 shares at 11.317USD and the significance rating of the trade was 68/100. 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 sh...

Who stands to benefit?

A potential peace deal between Russia and Ukraine could unlock one of the largest reconstruction efforts in modern history. The World Bank estimates Ukraine will need USD486bn in rebuilding efforts over the next decade, but we estimate this would add only c2% to annual European construction spending. While the direct earnings effect may be modest, we expect the “rebuild Ukraine theme” to drive investor sentiment. We see Volvo, Epiroc, Hexagon, Metso, Hiab and ABB as some of the primary beneficia...

Billerud (Buy, TP: SEK152.00) - Rosy outlook

Q4 earnings growth was strong on underlying support from markets, cost control and a favourable price/mix strategy. Although we have reduced our 2025e EBITDA by 4%, our optimistic earnings forecasts still translate into appealing earnings multiples. We also note ample earnings risk has been reduced for 2025–2026e following the solid Q4 report and overall positive outlook comments on pricing for Europe and North America. We reiterate our BUY and SEK152 target price.

Raising prices to reach mid-cycle

Q4 EBITDA +9%, weaker volume outlook

December: Pulp shipments +1% y-o-y

Little momentum, more value

Q4 preview

November: Pulp shipments -4% y-o-y

CO2 allowances - easy come, easy go

Billerud (Buy, TP: SEK152.00) - Pricing power and excess cash

We forecast significant earnings growth over the next few quarters on healthy pricing power for the European business and better volumes for the high-margin US business. Given the new 2025–2027 group capex guidance, we also expect attractive earnings conversion into cash. Our earnings estimates are largely unchanged, and we reiterate our BUY with a raised target price of SEK152 (150), reflecting slightly higher cash flow and dividend forecasts and our assumption of an even more overcapitalised b...

Billerud (Buy, TP: SEK150.00) - Rosy outlook for cash

Billerud’s CMD was interesting, in our view, and contained positive and negative news. Although there are no imminent plans for pursuing buybacks, this was mitigated by prudent investment guidance for 2025–2027, cSEK1.4bn below our estimate (c. SEK6/share). Considering FX tailwinds (stronger USD) combined with improving European markets beyond 2024e, we find the new long-term EBITDA target of at least SEK6bn per year realistic. We reiterate our BUY and SEK150 target price.

Old targets need a reset

September: Pulp shipments -10% y-o-y

Stora acquires a Finnish sawmill company