Stifel has raised its rating on Stora Enso (SEOAY, Financial) from Hold to Buy, setting a price target of EUR 11. The upgrade follows anticipation of reduced capital expenditures and enhanced cash flow, which are expected to materialize after the Oulu project concludes.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 1 analysts, the average target price for Stora Enso Oyj (SEOAY, Financial) is $14.15 with a high estimate of $14.15 and a low estimate of $14.15. The average target implies an upside of 52.97% from the current price of $9.25. More detailed estimate data can be found on the Stora Enso Oyj (SEOAY) Forecast page.
Based on the consensus recommendation from 1 brokerage firms, Stora Enso Oyj's (SEOAY, Financial) average brokerage recommendation is currently 1.0, indicating "Buy" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
SEOAY Key Business Developments
Release Date: April 25, 2025
- Sales Growth: Increased by 9% to EUR2.4 billion.
- Adjusted EBIT: EUR175 million, up 18% year-over-year with a 7.4% margin.
- Operating Working Capital: Decreased by 3 percentage points to 7%.
- Net Debt: Increased to EUR3.9 billion, with a net debt to EBITDA ratio of 3.2 times.
- Capital Expenditure: Approximately EUR240 million, expected to decrease after Q2.
- Cash Flow from Operations: EUR192 million, negatively impacted by a EUR100 million increase in working capital.
- Packaging Materials EBIT: Increased by EUR10 million to EUR62 million.
- Biomaterials EBIT: Decreased to EUR36 million due to lower sales prices and higher costs.
- Forest EBIT: Record high at EUR82 million, with assets fair value at EUR9.3 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sales grew by 9% in the first quarter, reaching EUR 2.4 billion.
- Achieved a robust adjusted EBIT of EUR 175 million, representing an 18% increase year-over-year.
- Successful production start of the new consumer board line at the Oulu Mill.
- Regulatory approval to proceed with the acquisition of Finnish sawmills, Junnikkala, enhancing operational synergies.
- Plans to implement a new leaner and flatter organizational structure to enhance efficiency and performance culture.
Negative Points
- Adjusted EBIT for the full year 2025 is expected to be adversely impacted by approximately EUR 100 million due to the ramp-up of the new packaging board line.
- Higher fiber costs negatively impacted results, with a total negative impact of EUR 131 million in the quarter.
- Cash flow after investing activities was negative at EUR 47 million, driven by the Oulu project.
- Wood costs remain at record high levels, impacting profitability.
- The Packaging Solutions division continues to face challenges due to market overcapacity and oversupply.
