DAVY VIEW

On February 1st, UPM cautioned on 2024E outlook due to (1) slower-than-expected ramp-up of its new Uruguay pulp mill and (2) weak label, plywood and biofuels demand/pricing. Our updated UPM €1.26bn 2024E comparable EBIT sits 3% below Infront Data consensus. While any downgrade is disappointing, on our reduced 2024-26E estimates we model over 20% UPM 2023-26E comparable EBIT CAGR, supported by Uruguay pulp mill, Finnish OL3 nuclear and German biochemical ramp-up. We reaffirm our ‘Outperform’ view but reduce our price target (PT) to €37.