MS turns bullish on UPM-Kymmene amid signs of pulp market rebound

Holmen AB

10/11/2025 13:39

** Morgan Stanley upgrades UPM-Kymmene UPM.HE to "overweight" from "equal weight", ups its target price by 15% to EUR 30/share, as it sees the Finnish forestry firm in a strong position to benefit as the global paper and pulp market starts to recover from its current low point

** As UPM is spending less on new projects, the broker expects the company could turn more than 65% of its earnings into free cash

** MS expects that this strong cash generation could give investors a total return of 8–10% in the next year through dividends and share buybacks

** It sees that UPM benefits from lower costs and greater efficiency, especially in pulp production

** MS says that UPM has one of the largest pulp capacities in Europe, giving it an advantage when pulp prices recover

** Even if pulp prices stay low, UPM could still deliver solid free cash returns (around 7% by 2026), it adds

** According to the brokerage, UPM looks more attractive than Nordic peers such as Holmen HOLMb.ST ("underweight") and SCA SCAb.ST ("equal-weight")

 (Reporting by Marta Frackowiak)

 ((marta.frackowiak@thomsonreuters.com))