Stora Enso (Buy, TP: EUR17.00) - All eyes on potential forest sales

We have cut our 2024e EBITDA by c9% on lower price assumptions for pulp, but our 2025–2026e is largely unchanged. Given the economic significance of the decision to divest 12% of the Swedish forestland, the outcome should overshadow the usual businesses. Due to three key reasons, we believe Stora Enso should be able to sell its forestland at book value or at a premium, which would crystallise significant values and be supportive of the stock. We reiterate our BUY and have raised our target price...

Wood is up and Pulp is down

Q3 preview

Q3 preview

Q3 preview

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

Billerud (Buy, TP: SEK150.00) - All eyes on capital allocation

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. We also expect good earnings conversion into cash given the more cautious investment strategy in the US. We have largely maintained our earnings forecasts, and reiterate our BUY with a raised target price of SEK150 (145), reflecting our increased conviction that Billerud will address its overcapitalised balance sheet, leading to possible...

July: Pulp shipments -4.0% y-o-y

June: Pulp shipments -4.5% y-o-y

Late cyclicals come later

Q2 EBIT 8% better

Stora Enso (Buy, TP: EUR16.50) - Improvements confirmed

With continuous earnings improvement in Q2 and a firm confirmation that the order backlog for the vital packing materials division is strong, we believe the risk in the company’s earnings outlook has eased after the Q2 report and the investment case has strengthened. We have tweaked our 2024–2027 forecasts and reiterate our BUY and EUR16.5 target price.

Wood and maintenance, again

Q2 clean EBIT +5%, watch out for wood/maintenance in H2e. Costs push prices higher. Mid-cycle value of EUR +18/sh.

Swedish Small and Medium Caps Cases

Swedish Small and Medium Caps Cases

Q2 clean EBIT +5%

Billerud (Buy, TP: SEK145.00) - Dressed for success

Thanks to market- and company-specific reasons, the Q2 report showed Billerud is moving in the right direction and earnings growth should continue in the coming quarters. Our optimistic earnings scenario is broadly intact, and we still see a solid investment case, particularly as the balance sheet is overcapitalised. We reiterate our BUY and have raised our target price to SEK145 (140) on lower forecast risk. Another solid earnings quarter. Q2 EBITDA of SEK884m was above our forecast, with the ...

En route for mid-cycle

Q2 clean EBITDA +22%

Stora Enso (Buy, TP: EUR16.50) - Moving in the right direction

We have made relatively small positive revisions to our 2024–2026e. Based on strong market fundamentals, we believe the Pulp division will remain a strong earnings contributor at the same time as better volumes and prices in the Packing division will continue to drive earnings growth for the group. We also see cost-cutting contributing to earnings growth, while a sale of the Chinese business could reveal hidden value. We reiterate our BUY and EUR16.5 target price.

Liquid packaging board just got a bit more risky