Oil prices extend losses as traders downplay Russia sanction risks
Investing.com - Berenberg has initiated coverage on Stora Enso OYJ (HEL:STERV) with a Hold rating and a price target of EUR10.40, citing mixed prospects for the Finnish paper and packaging company. The company, currently valued at $9.39 billion, has seen its stock rise 17.61% year-to-date, according to InvestingPro data.
The research firm acknowledges Stora Enso’s strong leadership position in the food and beverages fibre-based packaging market, but points to challenges in the broader consumer packaging sector.
Berenberg notes that growth in the consumer packaging market has corrected following the COVID-19 boom period, resulting in oversupply conditions that could impact the company’s performance.
The firm references Stora Enso’s June announcement regarding a potential demerger of its Swedish forest holdings, suggesting this move could increase the company’s exposure to consumer end-markets.
While Berenberg believes the potential demerger would help address Stora Enso’s high leverage and could unlock a limited re-rating for its "world-class industrial assets," the firm cautions that the deal would not resolve the company’s underlying profitability challenges.
In other recent news, UBS has downgraded Stora Enso from Buy to Neutral, citing limited upside potential. This decision accompanies a slight reduction in the price target from EUR10.80 to EUR10.70. Despite this downgrade, Stora Enso shares have experienced a significant rise of over 30% since April. This increase followed the company’s sale of 12% of its Swedish forest assets and its announcement of a review regarding a potential spin-off of its forest business. These developments have been pivotal for the company, impacting its strategic direction and market valuation. The analyst’s downgrade reflects a cautious stance on the company’s future growth prospects. Such moves are closely watched by investors who rely on analyst insights for guidance. These recent changes in analyst ratings and company strategy are significant for stakeholders monitoring Stora Enso’s performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.