JPM sees tough 2026 for paper firms

Smurfit WestRock

05/12/2025 12:59

** J.P. Morgan forecasts a tough 2026 for the EMEA paper and packaging sector, citing looming excess supply that prompts a highly selective stock-picking approach

** The brokerage expects global oversupply to pressure cartonboard prices, while EU containerboard and global pulp prices will likely hover around cost support levels for 2026

** Reflecting this cautious view, JPM downgrades Swedish forest products firm SCA SCAa.ST to "neutral" from "overweight" due to declining wood fibre prices

** The broker also keeps "underweight" ratings on Holmen HOLMb.ST and UPM UPM.HE, citing Holmen's unfavourable product mix and a deteriorating post-2027 pulp outlook for UPM

** However, the broker highlights the U.S. corrugated market as "a place to hide, and eventually thrive" thanks to disciplined supply and stable pricing prospects

** Consequently, JPM reiterates its "overweight" ratings on US-exposed firms Smurfit WestRock SWR.L and Packaging Corp of America PKG.N as its top ideas for 2026

(Reporting by Marta Frackowiak)

((marta.frackowiak@thomsonreuters.com))