Berenberg ups Borregaard to 'buy' on higher chemical prices

BORREGAARD ASA

Tue 09:06

** Berenberg upgrades Norwegian biorefiner Borregaard BRGB.OL to "buy" from "hold," expecting the group's wood-based chemicals business to benefit from higher petrochemical prices, especially from 2027
** The brokerage views the firm as "a good compounder that has maintained discipline on capital allocation," adding that its "near-unique" sulphite mill has partly insulated it from Chinese competition
** Higher chemical pricing will allow the group to raise prices just as new capacity at its main Sarpsborg site allows for a volume increase, the broker adds   
** It further expects the company to cut capital expenditure and improve cash flow once the expansions at the site are completed
** Berenberg says consensus earnings estimates are now more achievable and sees the firm boosting its core profits by over 10% in 2027
** Out of seven analysts that cover the stock, five rate it "strong buy" or "buy", and two rate it "hold", according to LSEG data

(Reporting by Marta Frąckowiak)
((marta.frackowiak@thomsonreuters.com))