Billerud (Buy, TP: SEK130.00) - US bolstering the team

The Q1 report demonstrates that Billerud is in good shape and, most importantly, significantly improved in pricing power across the board, in our view. Our optimistic earnings scenarios for Europe and North America are largely unchanged and we stress that a lot of earnings uncertainty has been eliminated. With modest consensus earnings expectations, attractive long-term valuation potential and a possibility for value creation from future conversion investments in the US, our confidence in the in...

In need of price hikes to offset wood costs

Q1 better – no wood is no good for Q2. Early-cyclicals improve, but paper still weak. Mid-cycle valuation points to SEK 135/share. BUY.

Billerud (Buy, TP: SEK128.00) - Strengthened investment case

We have left our estimates largely unchanged, but given a number of signs of better demand and pricing power for most products, we believe ample risks in our optimistic 2024–2026e have come off. Due to modest earnings expectations, attractive long-term valuation potential and possible value creation from future conversion investments in the US, we believe the investment case has become even stronger. We reiterate our BUY but have raised our target price to SEK128 (126).

Billerud (Buy, TP: SEK126.00) - In good shape

The Q4 report demonstrates that Billerud is in good shape and is able to generate healthy earnings and cash flow in challenging markets. On a positive note, management indicates better markets for 2024e, a view that we share as we believe the painful inventory restocking phase is largely done for most of Billerud’s clients. Reflecting a slightly more cautious view on prices and volumes, particularly for North America, we have made large cuts to our 2025–2026e. Still, our earnings scenario remain...

Billerud (Buy, TP: SEK126.00) - US boosting the team

Due to FX, we have slightly reduced our optimistic earnings estimates. Still, we remain confident that the earnings cycle will improve for 2024, which we expect to be supported by the Q4 report. For the Americas, we believe higher volumes will boost earnings and for Europe, we expect a likely improved inventory cycle to underpin a better mix. We still believe the potential ambitious investment in the US would be value-accretive, with the board likely to sanction the decision next year. We reiter...

Billerud (Buy, TP: SEK126.00) - Earnings growth is on

Due to good cost control, better than expected volumes and strong pricing in North America, Q3 earnings were well above our expectation. Owing to a subdued macro environment, Billerud sees no change in the weak demand but said customer destocking is largely complete. It also said it would push its decision on a US conversion investment to later in 2024. We reiterate our BUY but have raised our target price to SEK126 (112), as we believe significant risk has been eliminated.

Billerud (Buy, TP: SEK112.00) - In control of its (US) future

We have made relatively few changes to our optimistic earnings scenario, and remain convinced the earnings cycle is about to improve – something we believe should be confirmed in the Q3 report. We expect 2024 to see a distinct earnings improvement, while we also maintain our view that the ambitious investment in the US should prove value-accretive – once the board sanctions the decision. We reiterate our BUY and have raised our target price to SEK112 (110).

Billerud AB: 1 director

A director at Billerud AB bought 3,367 shares at 83.799SEK 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...

Billerud (Buy, TP: SEK110.00) - Americas is supporting the group

Although we have lowered our expectations for the European business, we believe this is offset by evidence of strong pricing power for the US business. Due to a more cautious view on Europe, we have cut our group EBITDA for 2023e by more than 20%. Still, we reiterate our BUY and SEK110 target price as we believe the earnings recovery case for 2024e has strengthened, given the solid outlook for the vital US business.

Northern Lights

Northern Lights

Billerud (Buy, TP: SEK110.00) - Contrarian BUY case intact

Due to headwinds from lower volumes and inventory write-downs, Billerud has guided for soft Q2 EBITDA of SEK100m–200m. However, we remain positive on H2e earnings, as we still expect shipments to recover from the (in our view unsustainably) low level. Our contrarian BUY case is intact, based on: 1) muted investor earnings expectations; 2) a healthy balance sheet; 3) strong earnings leverage from improved volumes in H2e; and 4) value creation from transformational conversion investments in the US...

Northern Lights

Billerud (Buy, TP: SEK124.00) - Get ahead of the curve

While price discipline appears to be healthy for many of Billerud’s key products, its earnings are being hurt by low volumes and unfavourable absorption of fixed costs. However, as we remain confident that many of its key end-markets should soon start to normalise, we see much better earnings ahead. Although we have cut our 2023e EBITDA by 7%, we reiterate our BUY and SEK124 target price. Besides a solid balance sheet, we believe Billerud could benefit once its key markets improve in H2e.

Northern Lights

Billerud (Buy, TP: SEK124.00) - Get ahead of the curve

Although we have taken a much more cautious earnings view on H1e, our longer-term view is relatively intact, and with the shares having significantly underperformed the market, we see an attractive entry point. With five solid reasons, we have upgraded the stock to BUY (HOLD) but have reduced our target price to SEK124 (130).

Northern Lights

Northern Lights

BillerudKorsnäs (Hold, TP: SEK150.00) - Tailwinds turning into headwin...

Due to much higher cost inflation and evidence of softer prices, we have cut our 2023e EBITDA by 14%. We have also lowered our 2022e DPS to SEK8 (10) on our expectation of more cautious management outlook comments with the Q4 report; in turn we have cut our target price to SEK150 (215), and with the limited potential upside, downgraded Billerud to HOLD (BUY).

Sector Fast Comment - October pulp data: shipments +2% y-o-y

Global shipments: +2% y-o-y, China +8% Pulp prices have started to fall but show resilience '23 supply manageable, but a recession could hit demand