Jefferies upgrades SCA to 'buy' on forest value

Svenska Cellulosa Aktiebolaget SCA

30/07/2025 11:54

** Jefferies upgrades Swedish forestry firm Svenska Cellulosa (SCA) SCAb.ST to "buy" from "hold", citing support from its forest assets

** "We view forest as a scarce real asset growing ahead of inflation long term," brokerage

** It sees the company's best-in-sector margins and integrated value chain reducing cost inflation risks, and adds that SCA's industrial assets "look well-placed on the cost curve"      ** Broker notes that the softwood pulp market has bottomed, with prices at cost support levels and production downtime by peers benefiting SCA's low-cost mills     ** Jefferies sees better dynamics for virgin containerboard versus recycled premium, with the ramp-up of the Obbola mill expected to drive margin improvement in the medium term     ** Broker anticipates SCA will be a key beneficiary when the construction cycle turns, expected in 2026-2027, driven by a shift to renewable building materials

** Out of 16 analysts that cover the SCA stock, eight rate it "strong buy"/"buy", five rate "hold", and three rate "sell"

(Reporting by Marta Frąckowiak)

((marta.frackowiak@thomsonreuters.com))