JPM stays selective on paper and packaging stocks going into 2025

Smurfit WestRock

29/11/2024 10:05

** J.P.Morgan remains selective on paper and packaging
stocks going into 2025, citing a challenging market environment
marked by high costs and low pulp and container board prices
    ** The broker expects pulp prices to remain low in the short
term, but sees scope for improvement from the latter part of
2025 through 2027
    ** While JPM expects box volumes to normalize in 2025, it
warns of possible delays or cancellations in packaging capacity
in Europe due to low margins of marginal-cost producers
    ** Despite the tough market conditions, it maintains
"overweight" rating on Smurfit WestRock  SWR.L , noting the
packaging firm's growth potential, planned cost-saving projects
and market undervaluation
    ** Similarly, JPM rates UPM  UPM.HE  as "overweight" saying
it expects the Finnish forestry group to return capital to
shareholders after debt reduction from a new mill, while pulp
price increases should boost earnings
    ** It keeps "neutral" on Stora Enso  STERV.HE  citing the
forestry firm's low pulp exposure, and says it does not expect a
product pricing recovery in the next two years

 (Reporting by Vera Dvorakova)
 ((vera.dvorakova@thomsonreuters.com))