SCA

Safe haven in uncertain market

  • Sectors : Paper & Packaging
  • Companies : SCA

Ratings and price correct at time of issue.

  • SCA

    Closing Price: 14595

  • RATING 04/10/23

  • PREVIOUS RATING 03/04/23

    NEUTRAL

DAVY VIEW

Swedish forest owner SCA reported 62% Q3 2024 EBIT growth to SEK1,476m, an 8.8% consensus beat, on higher-than-expected profits in Wood Products and Containerboard. Despite the Q3 2024 beat, reflecting our cautious view of pulp and containerboard prices, our updated 2024E SEK7.25bn EBITDA and SEK5.13bn EBIT sit 1-2% below the street. Positively, SCA’s vertical integration from forest ownership to producing pulp, containerboard and wood products – delivering sector-leading margins (36% EBITDA margin and 26% EBIT margin in 9M24) – and SEK154/sh forest backing (over 100% of SCA’s market cap) make it a safe haven in uncertain pulp and containerboard markets.

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Oct 25 2024, 14:10 IST/BST

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