Analyst Lars Kjellberg of Stifel Nicolaus maintained a Buy rating on UPM Kymmene (0NV5 – Research Report), reducing the price target to €34.50.
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Lars Kjellberg has given his Buy rating due to a combination of factors that highlight UPM Kymmene’s strong prospects for recovery and growth. Despite a challenging year in 2024, UPM’s decision to maintain its attractive dividend and initiate a share repurchase program reflects confidence in its business model. These actions signal a commitment to returning value to shareholders while positioning the company for future growth.
Furthermore, Kjellberg points to rising pulp prices as a near-term catalyst for UPM’s recovery, with the company having significant exposure to pulp markets, particularly hardwood pulp, which is expected to rebound strongly. Additionally, cost improvements in UPM’s Uruguay pulp mills and margin recovery in its Raflatac division are projected to enhance earnings and cash flow substantially. This improved financial flexibility should support continued dividend payments, potential acquisitions, and debt reduction, reinforcing the Buy recommendation.
According to TipRanks, Kjellberg is a 4-star analyst with an average return of 9.4% and a 58.21% success rate. Kjellberg covers the Consumer Cyclical sector, focusing on stocks such as International Paper Co, Avery Dennison, and Graphic Packaging.
In another report released today, Barclays also maintained a Buy rating on the stock with a €30.00 price target.