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

Better than peers, as usual

SCA (Buy, TP: SEK185.00) - In pole position

Due to lower-than-expected costs for the containerboard and sawn goods businesses, Q3 earnings were above our expectations. The Q3 report removed much of the earnings uncertainty for 2025e. As a result of its unique business model (with 50% backward integration in its own forest mitigating wood price inflation), signals that pulp prices are set to improve, and earnings support from growth investments, we continue to see a good risk/reward in a high-quality name. We reiterate our BUY and have inc...

Q3 EBITDA +7%

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

Q3 preview

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

SCA (Buy, TP: SEK180.00) - Attractive entry points in quality

Due to our more cautious near-term price assumptions for pulp coupled with FX headwinds (stronger SEK), we have lowered our 2024–2025e EBITDA by 4–5%. Still, our earnings for 2025–2026e remain well above consensus. As a result of its unique business model (with 50% backward integration in its own forest mitigating wood price inflation), signals that pulp prices are set to improve, and earnings support from growth investments, we continue to see a good risk/reward in a quality name. We reiterate ...

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