Education
About Us
Working with TipRanks
Follow Us
Stora Enso (SEOAY)
OTHER OTC:SEOAY
Top Page
Stora Enso
(OTC:SEOAY)
Select Model
Select Model
Rating:57Neutral
Price Target:
$14.50
▲(21.34% Upside)
Action:ReiteratedDate:02/06/26
The score is held back primarily by weak cash conversion (negative free cash flow over 2023–2025) and a shrinking revenue base, despite improved profitability and a strengthening balance sheet. Technicals are supportive with the stock above major moving averages, and valuation is reasonable with a moderate P/E and dividend. Earnings call messaging is constructive on targets and transformation progress, but near-term margin headwinds remain material.
Positive Factors
Sustainability leadership
Substantial cuts in Scope 1/2 emissions and external recognition create a durable competitive edge as customers and regulators favor low-carbon suppliers. This supports premium positioning, long-term contract wins, and lowers transition risk versus peers, underpinning sustainable demand and lower cost of compliance.
Value-creation program and pipeline
Completed and pipeline value-creation initiatives with quantified impacts show disciplined operational improvement and clear owners. Realized savings of ~EUR900m plus a EUR500–700m pipeline materially bolster margin durability and provide a structural route to reach stated EBIT and deleveraging targets over the medium term.
Oulu capacity investment (long-term growth)
Oulu represents a strategic capacity build that, once fully ramped, materially expands consumer board sales by ~EUR800m annually. Though it depressed near-term EBIT, the unit's long-term scale supports revenue diversification, product availability and margin recovery once ramp-up and efficiency gains are realized by 2027.
Negative Factors
Persistent negative free cash flow
Three years of negative free cash flow weakens funding flexibility and raises reliance on asset disposals or financing to support investments and dividend policy. Even with positive operating cash flow, persistent FCF deficits constrain the company's ability to sustainably cut net debt and fully fund transformation without external actions.
Shrinking revenue base
Multi-year top-line decline erodes scale and makes margin recovery harder: fixed costs and CapEx must be spread over lower volumes, and growth targets rely on successful recovery initiatives. Persistent revenue shrinkage reduces earnings power and increases execution risk for the company's medium-term targets.
Material fiber/wood and pulp cost pressures
Large, structural raw-material cost headwinds and volatile pulp markets compress margins across segments and can offset productivity gains. These persistent input-cost imbalances increase earnings volatility, complicate delivery of target EBIT margins, and weaken the durability of profit recovery absent sustained cost or price adjustments.
Stora Enso (SEOAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.86B
Dividend Yield2.64%
Average Volume (3M)17.15K
Price to Earnings (P/E)12.1
Beta (1Y)0.81
Revenue Growth7.62%
EPS GrowthN/A
CountryUS
Employees19,000
SectorBasic Materials
Sector Strength58
IndustryPaper, Lumber & Forest Products
Share Statistics
EPS (TTM)-0.04
Shares Outstanding613,077,760
10 Day Avg. Volume4,897
30 Day Avg. Volume17,151
Financial Highlights & Ratios
PEG Ratio-0.02
Price to Book (P/B)0.78
Price to Sales (P/S)0.90
P/FCF Ratio-64.64
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue1.27
Enterprise Value/Gross Profit3.96
Enterprise Value/Ebitda8.69
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.69
Revenue Forecast (FY)$11.07B
Stora Enso Business Overview & Revenue Model
Company DescriptionStora Enso is a leading global provider of renewable solutions in packaging, biomaterials, wooden construction, and paper, headquartered in Helsinki, Finland. The company operates across various sectors, including consumer products, industrial packaging, building solutions, and paper, with a strong emphasis on sustainability and innovation. Stora Enso's core products include corrugated packaging, wooden products, and a range of paper grades, all designed to meet the growing demand for eco-friendly and renewable materials.
How the Company Makes MoneyStora Enso generates revenue primarily through the sale of its diverse range of products across multiple sectors. Key revenue streams include packaging solutions, which cater to consumer goods and industrial markets, wooden construction products for the building sector, and various paper products for printing and publishing. The company's focus on sustainability has led to partnerships with businesses aiming to reduce their carbon footprint, enhancing its market position. Additionally, Stora Enso capitalizes on innovations in biomaterials and renewable energy, further diversifying its income sources. The company's strong presence in Europe and strategic investments in technology and sustainability initiatives contribute significantly to its earnings.
Stora Enso Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call described a company in active transformation: strong strategic progress (asset separation, divestments, sustainability achievements), disciplined financial targets, and delivered value-creation actions (roughly EUR 900 million achieved plus EUR 500–700 million pipeline). At the same time, near-term profitability is constrained by the Oulu ramp-up drag (~EUR 140 million), weaker pulp prices hitting Biomaterials, notable fiber/wood cost headwinds, and subdued market conditions. The balance of evidence shows meaningful structural improvements and clear plans to restore margins and leverage, while material short-term challenges persist.Q4-2025 Updates
Positive Updates
Group Sales and EBIT (2025)
Reported sales of EUR 9.3 billion and adjusted EBIT of EUR 528 million for full year 2025, demonstrating resilience in a challenging market.
Strategic Portfolio Actions and Capital Recycling
Completed strategic review of Swedish forest assets and initiated separation to form two companies; divested ~175,000 hectares of Swedish forest land for ~EUR 900 million, which contributed to a ~EUR 800 million reduction in net debt earlier in the year.
Net Leverage and Cash Generation Progress
Net debt to adjusted EBITDA improved to 2.8x; cash flow after investing activities positive as the heavy investment phase (notably Oulu) winds down; operating working capital stable at 7% of sales.
Value Creation Delivery and Pipeline
Achieved roughly EUR 900 million of annual profit impact from value creation programs (2024–2025) and identified an additional EUR 500–700 million of profit improvement initiatives backed by clear owners and execution plans.
New Financial Targets and Governance
Introduced targets: ~4% annual revenue growth, ~10% EBIT margin (excluding Swedish forests within 2–4 years), distribution of 50% of net profit as dividends, and net debt/EBITDA below 1x; reorganized reporting into new packaging-focused segments from Q1 2026.
Oulu Investment Long-Term Upside
Oulu consumer board line ramp-up weighed on 2025 earnings by ~EUR 140 million but is expected to add ~EUR 800 million in annual sales at full capacity (targeted by 2027); Oulu reached EBITDA breakeven in full-run month (October).
Sustainability and Recognition
Scope 1 and 2 emissions reduced by 61% vs 2019 (surpassing 2030 target of 50%); included on CDP Climate Change A list; launched IUCN partnership delivering a science-based framework for net-positive biodiversity impact.
Product Innovation and Awards
Launched Ensovelvet premium uncoated board (recyclable, lower carbon footprint) and supplied CLT for the world's first large-scale timber data center; received World Packaging Organization awards in three categories.
Packaging and Segment-level Resilience
Packaging Materials and Packaging Solutions showed underlying resilience: Packaging Materials improved adjusted EBIT slightly y/y despite Oulu drag (EUR 31 million), and Packaging Solutions increased sales and EBIT supported by product mix and value creation.
CapEx Discipline
Planned CapEx around EUR 550 million (lower year-on-year), reflecting the end of a heavy investment phase and a renewed emphasis on disciplined, return-focused capital allocation.
Negative Updates
Adjusted EBIT Pressure and Q4 Decline
Adjusted EBIT decreased for the full year and in Q4; sales declined in Q4 due to slightly lower board prices and significantly lower pulp prices, with Biomaterials the primary segment hit by weaker pulp prices.
Oulu Ramp-up Drag on Earnings
Oulu ramp-up negatively impacted 2025 EBIT by ~EUR 140 million (EUR 31 million impact in Q4); Q1 2026 guidance for Oulu drag between EUR 15–30 million; full benefits not realized until full capacity by 2027.
Biomaterials Weakness from Lower Pulp Prices
Biomaterials sales and adjusted EBIT fell due to significantly lower pulp prices and weaker demand in Europe and China, with related headwinds not fully offset by cost actions.
Significant Fiber/Wood Cost Headwinds
Management cited a fiber cost headwind close to EUR 300 million for the year and an earlier estimate of ~EUR 900 million annual headwind versus 2021 due to higher wood costs, pressuring margins.
Market Conditions Remain Subdued and Volatile
Company expects 2026 market conditions to remain subdued and volatile due to macroeconomic and geopolitical uncertainty, which could delay margin recovery despite internal actions.
Net Debt Still Above Long-term Target
Although net debt improved materially after divestments, leverage remains at 2.8x net debt/adjusted EBITDA — above the newly stated ambition to get below 1x through continued cash generation and disciplined capital allocation.
Emission Certificates Income to Decline
Guidance points to much lower income from sale of emission certificates in the year ahead, primarily affecting three business units within Biomaterials and adding to near-term headwinds.
Segment-specific Price Pressure and FX Headwinds
Quarter-on-quarter price realization in Packaging Materials was notably negative (c. -7% Q3→Q4 reported by participants), containerboard/cartonboard price softness and a weaker U.S. dollar weighed on realized prices and margins; stronger SEK also increases local costs.
Company Guidance
Stora Enso’s guidance focuses on disciplined growth and margin expansion: management targets about 4% annual revenue growth and roughly a 10% EBIT margin (excluding Swedish forests) within 2–4 years, plans to distribute 50% of net profit as dividends and to cut net debt/adjusted EBITDA from the current 2.8x to below 1x; the Board will propose a EUR 0.25/share dividend at the AGM on 24 March 2026. For 2025 the group reported EUR 9.3bn sales and EUR 528m EBIT, saw net debt fall by ~EUR 800m after divesting ~175,000 ha of Swedish forest for ~EUR 900m (forest fair value ~EUR 8.5bn / EUR 10.75 per share), and held operating working capital at 7% of sales. Management reiterated Oulu’s ramp‑up weighed ~EUR 140m on 2025 EBIT (Q1 2026 EBIT drag guided at EUR 15–30m) but should add ~EUR 800m of sales at full capacity (target 2027); it said value‑creation measures have delivered ~EUR 900m of annual P&L impact to date with an additional EUR 500–700m identified, cited fiber/wood cost headwinds (c. EUR 900m vs 2021 and ~EUR 300m this year), expects cash flow after investments to improve as heavy investments end, and plans CapEx around EUR 550m.Stora Enso Financial Statement Overview
Summary
Earnings recovered in 2025 (positive net income and improved operating margin) and leverage is manageable with improving debt-to-equity, but the multi-year revenue decline and three straight years of negative free cash flow (including 2025) materially weaken the quality and durability of the recovery.Income Statement
Profitability rebounded in 2025 (net income turned positive to ~7.5% of sales, with EBIT margin ~9%), a sharp improvement from losses in 2023–2024. However, revenue has been shrinking for several years and accelerated to a steep decline in 2025, and margins remain well below the very strong 2021–2022 peak (double-digit net margins and materially higher operating margins). Overall: clear earnings recovery, but top-line momentum and margin durability are still concerns.54
Neutral
Balance Sheet
Leverage looks manageable: debt-to-equity improved to ~0.41 in 2025 from ~0.57 in 2024 and is not extreme for the sector. Equity is sizeable relative to assets, providing balance-sheet cushioning, and returns on equity recovered to mid-single digits in 2025 after being negative in 2023–2024. Key drawback: returns are still well below 2021–2022 levels, indicating the business is not yet back to prior earning power.70
Positive
Cash Flow
Cash generation is the weak spot. Operating cash flow stayed positive in 2023–2025, but it covers only about one-fifth of debt in recent years (roughly 0.20–0.23). Free cash flow has been negative for three consecutive years (2023–2025), and in 2025 it was negative despite positive net income, pointing to ongoing cash absorption (e.g., working capital/capex pressure). Strength: operating cash flow remains consistently positive, but sustained negative free cash flow raises funding and flexibility risk.38
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 9.33B | 9.05B | 9.40B | 11.68B | 10.16B |
| Gross Profit | 2.71B | 3.57B | 3.05B | 5.15B | 4.68B |
| EBITDA | 1.36B | 603.00M | 226.00M | 2.53B | 2.10B |
| Net Income | 695.00M | -136.00M | -357.00M | 1.55B | 1.27B |
Balance Sheet | |||||
| Total Assets | 19.06B | 19.80B | 20.75B | 20.92B | 19.03B |
| Cash, Cash Equivalents and Short-Term Investments | 1.28B | 2.02B | 2.46B | 1.92B | 1.53B |
| Total Debt | 4.47B | 5.73B | 5.21B | 3.92B | 3.87B |
| Total Liabilities | 8.41B | 9.81B | 9.87B | 8.42B | 8.36B |
| Stockholders Equity | 10.80B | 10.14B | 10.98B | 12.53B | 10.68B |
Cash Flow | |||||
| Free Cash Flow | -130.00M | -161.00M | -237.00M | 878.00M | 832.00M |
| Operating Cash Flow | 645.00M | 952.00M | 752.00M | 1.58B | 1.48B |
| Investing Cash Flow | 60.00M | -1.13B | -1.31B | -742.00M | -449.00M |
| Financing Cash Flow | -1.49B | -301.00M | 1.08B | -450.00M | -1.22B |
Stora Enso Technical Analysis
Neutral
11.95
Price Trends
12.65
Negative
12.00
Positive
11.40
Positive
Market Momentum
0.16
Positive
41.20
Neutral
32.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SEOAY, the sentiment is Neutral. The current price of 11.95 is below the 20-day moving average (MA) of 13.19, below the 50-day MA of 12.65, and above the 200-day MA of 11.40, indicating a neutral trend. The MACD of 0.16 indicates Positive momentum. The RSI at 41.20 is Neutral, neither overbought nor oversold. The STOCH value of 32.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SEOAY.
Stora Enso Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $5.63B | 18.57 | 9.03% | 1.53% | -3.90% | -25.97% | |
67 Neutral | $13.70B | 4.81 | 35.49% | 1.96% | 6.65% | 47.88% | |
64 Neutral | $5.77B | 38.72 | 8.58% | 1.37% | -3.26% | -46.80% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
57 Neutral | $9.86B | 12.09 | -1.03% | 2.64% | 7.62% | ― | |
56 Neutral | $1.86B | 14.64 | 14.56% | 3.51% | -8.92% | -32.30% | |
44 Neutral | $235.12M | 1.93 | -10.47% | ― | -21.76% | -1214.73% |
* Basic Materials Sector Average
SEOAY
Stora Enso
12.42
1.33
12.03%
CLW
Clearwater Paper
14.66
-11.07
-43.02%
LPX
Louisiana-Pacific
82.66
-12.26
-12.92%
UFPI
UFP Industries
99.49
-5.16
-4.93%
SUZ
Suzano Papel e Celulose SA
10.85
1.40
14.78%
SLVM
Sylvamo Corp
47.13
-19.61
-29.38%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.