Price rises may boost paper & packaging firms' outlooks, JPM says
17/04/2024 09:42
** Recent price increases in pulp and containerboard raise
the chance for upward guidance revisions from paper and
packaging names, J.P.Morgan says
** JPM downgrades SCA SCAb.ST to "underweight" from
"neutral", saying that in order to justify the current
valuation, it would need to see pulp and containerboard prices
about 8% higher than forecast until 2027
** Even in that scenario, it sees better investment options
in UPM UPM.HE , Stora Enso STERV.HE , and its top pick Smurfit
Kappa SKG.I (all "overweight")
** JPM expects the companies to be cautiously optimistic on
2024 outlook, as pulp has seen two separate price increases
since Q4 results, while testliner had one larger and
sooner-than-expected increase
** It says Stora Enso's guidance seems to be the easiest to
achieve
** There is a low probability of Stora Enso making a formal
guidance upgrade in Q1 due to low visibility, but if prices
remain, an upgrade is possible in Q2, JPM adds
(Reporting by Marta Frąckowiak)
((marta.frackowiak@thomsonreuters.com))