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

UPM (Buy, TP: EUR42.00) - Earnings growth and buybacks

Since UPM had pre-released Q3 EBIT and provided new Q4 guidance, the Q3 report included no real surprises. Still, we are encouraged by UPM’s focus on continuously reducing fixed costs. Based on improved volumes in combination with better prices for pulp and biofuels, we are confident UPM will show impressive earnings growth. Based on reduced 2025–2027e capex, we also expect strong free cash flow, leaving the balance sheet overcapitalised, and paving the way for buybacks on top of compelling divi...

Pulp is down and Wood is up

Q3 in-line with PW

Stora acquires a Finnish sawmill company

UPM (Buy, TP: EUR42.00) - Still fit for growth and buybacks

Although we were surprised and disappointed by UPM’s 2024 profit warning, we remain confident that it will report strong earnings growth for 2025–2026. With incrementally higher profits from the new business in Uruguay and low 2025–2026e capex, we also expect strong free cash flow, leaving the balance sheet overcapitalised with 2025–2026e NIBD/EBITDA of 0.5–0.1x, paving the way for much-increased, value-accretive shareholder cash allocations. We reiterate our BUY but have cut our target price to...

PW and Q3: Wood is up, pulp is down

Wood is up and Pulp is down

Q3 preview

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

UPM (Buy, TP: EUR45.00) - Fit for growth and buybacks

UPM (UPM FH, Buy) - Fit for growth and buybacks (16 pages)

Heads-up for CMD 5 September

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

UPM (Buy, TP: EUR45.00) - Fit for buybacks

UPM is set to reap the benefits of five years of investing heavily, while hitting the pause button on capex in 2025–2026e. Thus, we forecast strong free cash flow, leaving UPM debt-free by 2026, paving the way for much-increased, value-accretive shareholder cash allocations. Assuming UPM took full advantage of its mandate and bought back 9.4% of its shares at a c10% premium, we calculate 2025e NIBD/EBITDA would be c0.9x, well below its

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

UPM (Buy, TP: EUR45.00) - Full speed ahead

Confirmation in the Q2 report that the new pulp mill in Uruguay is running at full design capacity significantly eased earnings uncertainty and strengthened the investment case, we believe. We have tweaked our 2024–2027 forecasts, and reiterate our BUY and EUR45 target price.

Nice momentum for H2 EBIT

Q2 clean EBIT 16% below

UPM (Buy, TP: EUR45.00) - All eyes on Uruguay

We remain well above consensus on 2024–2025e earnings, and with much higher pulp prices directly benefiting the growing pulp business, as well as continued market support for other industries, we see a strong likelihood of consensus being raised following the Q2 report. We have made relatively few changes to our earnings forecasts, and continue to believe the market is being overly cautious about UPM’s attractive low-cost pulp business being heavily tilted to Uruguay. We reiterate our BUY and EU...

Liquid packaging board just got a bit more risky