Stora Enso: Return to the mood of the financial crisis
We reiterate our Reduce recommendation and target price of EUR 11.50 for Stora Enso. The company reports its Q2 results on Friday. We have significantly cut our estimates for Stora Enso, especially for the current year, due to the gloomy market situation in the forest sector that has further deteriorated over the spring. In the long term, the stock is still not expensive, but the short-term valuation is high (2023e-2024e: P/E 27x and 13x) and rapid upward drivers are conspicuous by their absence. We still prefer UPM and Metsä Board, which we believe offer slightly better risk/return ratios in the forest sector, which is favorably valued for long-term investors.
Stora Enso
11.45
11.5
Reduce
Reduce
Stora Enso is a global forest industry group. The business segments include the production and development of newsprint and book paper, consumer boxes, industrial packaging and other wood products. The group is active on a global level with the largest presence in Europe and North America. The company was founded in 1998 at the merger of Finska Enso and Swedish Stora Kopparbergs Bergslags Aktiebolag. The head office is located in Helsinki.
Read more on company pageKey Estimate Figures2023-07-18
| 2022 | 23e | 24e |
|---|
| 2022 | 23e | 24e | |
|---|---|---|---|
| Revenue | 11,679.8 | 9,946.3 | 10,174.8 |
| growth-% | 14.9 % | -14.8 % | 2.3 % |
| EBIT (adj.) | 1,890.2 | 544.8 | 989.9 |
| EBIT-% (adj.) | 16.2 % | 5.5 % | 9.7 % |
| EPS (adj.) | 1.84 | 0.42 | 0.86 |
| Dividend | 0.60 | 0.40 | 0.50 |
| Dividend % | 4.6 % | 5.2 % | 6.6 % |
| P/E (adj.) | 7.13 | 18.29 | 8.84 |
| EV/EBITDA | 4.70 | 8.22 | 5.51 |
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