Barclays upgrades Stora Enso as forest asset sale unlocks value

Smurfit WestRock

07/10/2024 09:25

** Barclays double upgrades Stora Enso  STERV.HE  to
"overweight" from "underweight", expecting a boost to the
Finnish forestry firm's balance sheet from its planned sale of
forest assets
    ** "The potential sale of about 12% of Stora Enso's Swedish
forest assets ... is higher than total forest land transacted in
Sweden over the last five years," the brokerage says
    ** If the company can sell the forest assets at book value
or higher, it would imply upward potential to forest valuation
in general, and thus to Scandinavian forest companies, it adds
    ** It says the forest sale could improve Stora Enso's
balance sheet, helping reduce debt and net debt/EBITDA by about
0.3x to about 2.3x as of December 2024
    ** Barclays adds Stora Enso is probably selling "at the
right time" as there is a shortage of wood in the Nordics and
wood costs are high
    ** It also downgrades DS Smith  SMDS.L  to "underweight"
from "equal weight" citing limited potential returns on a
relative basis, and says Smurfit WestRock  SWR.L  ("overweight")
is more attractive at current valuations

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