Billerud Korsnäs divides the analysts into business



Analysts do not agree after Billerud Korsnäs Capital Markets Day.

Packaging manufacturer Billerud Korsnäs rose on Tuesday, as SEB Equity Research offered its recommendation for the share from previous sales at a new price of SEK 120, an increase of SEK 95.

The increase is realized by the web-hosting capital market event of the company that was held on Monday and where the news flow was not only positive.

"Indeed, the investment forecast was disappointing, along with the guidelines for deployment in 2019 [av den nya kartongmaskinen vid Gruvön] was as negative as we expected, but we think the market is already prepared to look further, "the bank writes in an analysis update.

Billerud Korsnäs announced on Monday that the new carton machine (KM7) is now expected to cost in the order of SEK 7.6 billion, an increase compared to the previous estimate of around SEK 7 billion and clearly higher than the original forecast of SEK 5 , 7 billion.

The company also stated that the deployment of KM7 is expected to impact the EBbitda profit of the company with SEK -500 million in 2019. The corresponding impact is expected to be -200 million, with a "positive" effect only in 2021.

"The coming year will be a challenge, but we think it's about when, instead of about, [positiva] The cash flow starts to materialize after major investments have been made, "continues SEB analyst.

On the positive side, the bank also notes that Billerud Korsnäs CEO Petra Einarsson made it clear that the company could consider selling the entire forest companies in Bergvik.

"Whether it's a good idea or not depends on the circumstances and how long-term needs can be guaranteed, but the willingness of the company to visualize some of its hidden values ​​has a significant positive impact on the balance sheet." says the analyst.

Billerud Korsnäs also presented positive market prospects in both the short and the long term.

Pareto Securities also focuses on the positive aspects of the capital market event. The securities company repeats its purchase recommendation for Billerud Korsnäs, although the target price has been adjusted to 125 SEK (130).

"Buying shares when it is not popular has worked before and we think the story will be repeated as soon as a certain degree of stability is achieved," writes Pareto.

Kepler Cheuvreux is less optimistic and repeats its recommendation to lower with the benchmark of SEK 95.

"We compare the multiples with comparable companies that produce packaging, they trade on average to EV / EBITDA of about 7.5x for 2018. Given the weak profit trend and persistent challenges, we consider a multiple of 7.3x as reasonable," writes Kepler Cheuvreux .

Billerud Korsnäs was traded on Tuesday afternoon to around 112: 65, an increase of just under 5 percent for the day.


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