Morgan Stanley analyst Ioannis Masvoulas downgraded the rating on Mondi plc to a Sell yesterday, setting a price target of p800.00.
Claim 70% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
Ioannis Masvoulas has given his Sell rating due to a combination of factors related to Mondi’s earnings outlook, valuation, and market conditions. He anticipates that group profitability will remain under pressure, with his EBITDA forecasts for both late 2025 and 2026 sitting materially below market expectations, even after allowing for a modest recovery in margins in the second half of 2026. On his estimates, the stock is trading at a 2026 EV/EBITDA multiple significantly above its historical average, implying that Mondi is expensive relative to its long-term valuation range. In parallel, he expects a year-on-year reduction in the dividend with the first-half 2025 results, signaling limited support from income for shareholders.
Masvoulas also highlights that the operating backdrop for Mondi remains challenging, with weak demand across grades driven by subdued consumer confidence and no clear signs of a sustained recovery within the next 12–18 months. While he allows for the possibility that capacity cuts in Europe could be a positive catalyst, he stresses that this is uncertain and not built into a more optimistic base case. He further notes that kraft paper prices have been falling and could decline further, with no obvious price floor in sight, adding downside risk to earnings. Given the combination of weak fundamentals, downside risk to consensus forecasts, and a valuation that already sits above long-run multiples, he concludes that investors are likely to find a more attractive entry point at lower levels, supporting his Underweight (Sell) recommendation.
According to TipRanks, Masvoulas is a 4-star analyst with an average return of 6.5% and a 61.27% success rate. Masvoulas covers the Basic Materials sector, focusing on stocks such as Lundin Mining, Stora Enso Oyj, and Antofagasta.