SB1 Sees 90 Percent Upside for Billerud, Lifts Target to SEK 110
Swedish broker SB1 has raised its price target for forestry group Billerud to 110 SEK from 76.95 SEK, reiterating a buy recommendation, according to EFN.
The analysts said the market picture for Billerud has become ”significantly more positive,” citing a low valuation combined with several near- and long-term catalysts that could give the stock a potential upside of 90 percent within three years.
SB1 pointed to peer SCA’s announced price increase of 100 euros per tonne for kraftliner cartonboard from September 1, alongside signs from competitors Metsä Board and Mondi of improved demand and pricing for containerboard products.
The broker also noted that while Mondi expects higher wood raw material costs in the third quarter due to a tighter Central European market, Billerud should face somewhat lower wood costs in the second half, giving it a clear cost advantage given that wood raw material accounts for 40 percent of operating costs.
Longer term, SB1 said Billerud benefits from the structural shift from plastic to fiber-based packaging, while its US graphic paper business continues to generate strong profits.
If its 2026-2028 forecasts hold and Billerud deploys its strong balance sheet more aggressively, SB1 estimates the stock could be worth 150 SEK within three years.
