Muted pricing outlook clouds better demand in Nordic forestry - JPM

Svenska Cellulosa Aktiebolaget SCA

17/01/2024 13:57

** J.P.Morgan expects Nordic forestry firms to flag muted
pricing outlook in their Q4 reports, even though it notes slight
improvement in demand prospects
    ** The broker says it still sees room for pulp prices to
soften, and expects no significant price increases in carton
board
    ** While JPM predicts Q4 EBIT for UPM  UPM.HE , Svenska
Cellulosa SCA  SCAb.ST , and Stora Enso  STERV.HE  at about
7-16% below consensus, it expects investors to focus more on
demand and pricing outlook
    ** The broker forecasts further recovery in EBIT for UPM
("overweight") and continued cost improvement from Paso de los
Toros; raises TP by 5% to 40.4 euros
    ** It sees another difficult quarter for Stora Enso
("overweight") and expects the company's outlook to be
conservative due to its large exposure to consumer board
    ** The broker expects a mixed guidance from SCA ("neutral")
and a lower EBIT q/q, but still sees the company as 
"attractively placed for long-term growth"

 (Reporting by Elsa Ohlen)
 ((elsa.ohlen@thomsonreuters.com;))