JPM expects improved set-up for Europe paper & packaging

Holmen AB

05/11/2024 11:32

** J.P.Morgan says set-up has improved for paper & packaging
since earnings season, with hardwood pulp prices near a bottom
    ** Says prices fall to levels that historically trigger more
pulp purchases and result in pro-active capacity curtailments
    ** Expects only mild recovery in pulp in 2025, but sees
improving operating rates from 2025 through 2027
    ** Moreover, JPM notes softwood pulp market continues to
tighten, expecting prices to hold at current levels and improve
in line with hardwood prices
    ** JPM favours UPM-Kymmene  UPM.HE  ("overweight") on an
improving price outlook and expects improving sentiment for UPM
that allows longer-term value to be reflected in its share price
    ** JPM raises SCA  SCAb.ST  to "neutral" from "underweight"
saying recent stock weakness has given it an appropriate
valuation; also expects improving prices to boost earnings
    ** JPM retains "underweight" on Holmen  HOLMb.ST  due to its
valuation, and "neutral" on Stora Enso  STERV.HE , which it
warns will be a "value trap", absent material catalysts

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