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Investing.com - JPMorgan has downgraded UPM-Kymmene OYJ (HEL:UPM) (OTC:UPMKY) from Neutral to Underweight, while reducing its price target to EUR23.70 from EUR26.20.
The investment bank cited deteriorating long-term pulp market conditions as the primary reason for the downgrade. JPMorgan noted that while it had maintained an Overweight rating on UPM since early 2025, the outlook has now changed significantly.
The firm pointed to a recent drop in Chinese pulp production costs by approximately $75 per ton, which has reset price expectations across the global market. This development undermines a key support factor for global pulp prices.
JPMorgan also expressed concern about the supply side of the pulp market beyond 2027, noting that several previously unconfirmed production projects have now been confirmed. These new capacity additions are expected to create a weak supply/demand outlook after 2027.
Despite forecasting mild pulp price increases in 2026 and 2027, JPMorgan believes the negative long-term outlook will likely dampen investor enthusiasm for UPM-Kymmene shares, with near-term prospects also appearing challenging.
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