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Aug 29 2023, 07:00 IST/BST
Paper & Packaging
Expect H2 packaging re-rating
- Sectors : Paper & Packaging
- Companies : Stora Enso | SCA | Mondi | UPM | Huhtamaki | DS Smith | Smurfit Westrock
Ratings
Ratings and price correct at time of issue
| Company | Rating | Date | Previous Rating | Date | Closing Price |
|---|---|---|---|---|---|
| DS Smith | OUTPERFORM | 23/01/23 | Neutral | 03/04/19 | 293p |
| Huhtamaki | NEUTRAL | 03/04/23 | N/A | N/A | 2939c |
| Mondi | NEUTRAL | 05/05/20 | Outperform | 19/06/12 | 1267.0p |
| SCA | NEUTRAL | 03/04/23 | N/A | N/A | 13965 |
| Smurfit Westrock | OUTPERFORM | 30/06/09 | N/A | N/A | 3668c |
| Stora Enso | NEUTRAL | 24/07/23 | Outperform | 10/05/23 | 1113c |
| UPM | OUTPERFORM | 03/04/23 | N/A | N/A | 2988c |
DAVY VIEW
With easing de-stocking, European and US box demand troughed in H1 2023. We believe 1) substantially easier H2 demand comparators, 2) de-rated valuations 10-20% below ten-year averages and 3) lower energy and OCC raw material costs support a H2 2023 packaging re-rating. We forecast a 2024 return to box demand growth: our packaging order of preference is 1) Smurfit Kappa Group (SKG), 2) DS Smith and 3) Mondi.
