DAVY VIEW

Lower prices (wood, pulp and containerboard) saw SCA’s Q4 2023 operating profit fall 30% year-on-year (yoy) to SEK1.1bn. With SCA shares trading at c.10% discount to its SEK107.5bn (or SEK153/share) forest valuation on fears of forest write downs, we welcome SCA’s plan for additional forest valuation methodology and accounting disclosure to help ease investor concerns. Taking a cautious 2024E wood and pulp demand/pricing outlook, our SCA 2024E SEK5.2bn EBIT sits 5% below street. We reaffirm our ‘Outperform’ rating with unchanged (SOTP based) SEK175 price target.