Stora Enso Oyj (STERV.HE) | Investment Case

1. Company Snapshot

1.a. Company Description

Stora Enso Oyj provides renewable solutions for the packaging, biomaterials, wooden constructions, and paper industries worldwide.It operates through Packaging Materials, Packaging Solutions, Biomaterials, Wood Products, Forest, Paper, and Other segments.The company's Packaging Materials segment offers virgin and recycled fiber renewable and recyclable packaging materials for food and drink, pharmaceutical, and transport packaging.

Its Packaging Solutions segment develops and sells fiber-based packaging products and services, including corrugated, carton board and other converting products, design services, automation solutions, and formed fiber and wood foams for various market sectors, such as store retail, e-commerce, and industrials.The company's Biomaterials segment provides various pulp grades for paper, board, tissue, textile, and hygiene product producers; and tall oil and turpentine from biomass.Its Wood Products segment offers wood-based solutions, including digital tools for designing of building projects; sawn woods; and pellets for sustainable heating, as well as applications for windows, doors, and packaging industries.

The company's Forest segment engages in sustainable forest management, as well as supplies wood.Its Paper segment provides paper products for print and office use.The company's Other segment holds an interest in Pohjolan Voima Oy, a company that produces electricity and heat.

It serves packaging manufacturers, brand owners, paper and board producers, publishers, retailers, printing houses, converters, joinery, and construction companies.The company was incorporated in 1996 and is headquartered in Helsinki, Finland.

Show Full description

1.b. Last Insights on STERV

Stora Enso Oyj's recent performance was driven by its resilient financial performance, with €9.326 billion in revenue and €695 million in net income. The company's sharpened strategic focus, particularly in renewable packaging, biomaterials, and wood products, has garnered investor attention. Its upcoming Annual General Meeting on March 24, 2026, and a strategic review of its Central European sawmills and building solutions operations are expected to drive growth. The company's new financial reporting structure, effective January 2026, will also enhance focus on core packaging business.

1.c. Company Highlights

Last Price	11.36
Change Percentage	-0.09%
Open	11.3
Previous Close	11.37
Market Cap ( Millions)	8959
Volume	255633
Year High	12.26
Year Low	7.1
M A 50	10.53
M A 200	9.69

FCF Yield	-1.45%
Dividend Yield	2.20%
ROE	6.64%
Debt / Equity	41.39%
Net Debt / EBIDTA	239.66%
Price To Book	0.83
Price Earnings Ratio	12.87
Price To FCF	-68.91
Price To sales	0.96
EV / EBITDA	8.99

2. Stora Enso's Q4 Results: A Resilient Performance Amidst Challenging Market Conditions

Stora Enso reported a revenue of EUR 9.3 billion in 2025, with an adjusted EBIT of EUR 528 million. The company's EPS came in at EUR 0.4571, significantly beating estimates of EUR 0.105. The net debt to adjusted EBITDA improved to 2.8x, supported by the divestment of approximately 175,000 hectares of Swedish forest land at a value of EUR 900 million. The company's financial performance was resilient despite a challenging environment, with Niclas Rosenlew noting that "underlying businesses developed nicely, considering the tough market, and value creation actions more than offset market headwinds."

Publication Date: Feb -17

                                    📋 Highlights
                                    Revenue & Profitability::
                                                Achieved EUR 9.3 billion sales and EUR 528 million EBIT in 2025, with EBIT margin at 5.7% despite market challenges.
Debt Reduction::
                                                Net debt-to-adjusted EBITDA improved to 2.8x, driven by EUR 900 million from divesting 175,000 hectares of Swedish forest land.
Sustainability Progress::
                                                Reduced Scope 1 and 2 emissions by 61% year-over-year, exceeding 2030 targets ahead of schedule.
Strategic Financial Targets::
                                                Aiming for 4% annual revenue growth, 10% EBIT margin, 50% dividend payout, and net debt/EBITDA below 1x by 2026.
Oulu Impact::
                                                Oulu consumer board ramp-up projected to drag EBIT by EUR 15–30 million in Q1 2026, but expected to strengthen long-term competitiveness.

                                

Segmental Performance

The company's Packaging Materials segment saw a decrease in sales, but profitability was preserved thanks to good value creation activities and strong customer offers. In Packaging Solutions, the company delivered a positive result despite ongoing market challenges. Biomaterials faced challenging market conditions, but intensified value creation actions partly mitigated the negative effect. Wood Products saw an increase in sales mainly due to Junnikkala volumes and higher sales prices.

Guidance and Outlook

As the company enters 2026, it expects market conditions to remain subdued and volatile. Stora Enso's priorities are clear: executing its strategy, driving proactive and determined work across the group, improving profitability, cash flow, and cost competitiveness, and maintaining a disciplined approach to capital allocation. Analysts estimate next year's revenue growth at 3.4%, indicating a moderate improvement in market conditions.

Valuation

With a P/E Ratio of 12.86, P/B Ratio of 0.83, and EV/EBITDA of 8.98, the company's valuation appears reasonable. The dividend yield of 2.2% is also attractive, given the company's commitment to distributing 50% of its net profit as dividends. The Net Debt / EBITDA ratio of 2.4x is expected to decrease as the company continues to deleverage.

Key Drivers

The company's key drivers include the ramp-up of the Oulu consumer board line, which is expected to strengthen its long-term position and competitiveness. The company's focus on value creation, operational efficiency, and commercial excellence is also expected to drive profitability. Additionally, the company's disciplined approach to capital allocation and commitment to reducing its carbon footprint are positive factors.

3. NewsRoom

Stora Enso publishes its Annual Report and Remuneration Report 2025

Feb -12

Source:

A Look At Stora Enso Oyj (HLSE:STERV) Valuation After Recent Short Term Share Price Gains

Feb -08

Source:

Lenzing acquires controlling stake in Sweden’s TreeToTextile

Feb -06

Source:

Stora Enso Oyj (SEOAY) Full Year 2025 Earnings Call Highlights: Strategic Milestones and Market ...

Feb -04

Source:

Notice to the Annual General Meeting of Stora Enso Oyj

Feb -04

Source:

Stora Enso Financial Statements Release 2025: Sharpened strategic focus

Feb -04

Source:

Lenzing Takes Majority Stake in TreeToTextile

Feb -03

Source:

Proposals of the Shareholders' Nomination Board to Stora Enso Oyj's Annual General Meeting 2026

Jan -16

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.57%)

6. Segments

Packaging Materials

Expected Growth: 3.5%

Stora Enso Oyj's Packaging Materials segment growth of 3.5% is driven by increasing demand for sustainable packaging solutions, growth in e-commerce, and rising consumption of packaged goods in emerging markets. Additionally, the company's focus on innovation and cost savings initiatives contribute to the segment's growth.

Wood Products

Expected Growth: 3.2%

Stora Enso Oyj's Wood Products segment growth of 3.2% is driven by increasing demand for sustainable packaging and biomaterials, coupled with the company's strategic investments in modernizing its production facilities and expanding its product offerings. Additionally, growing construction activity and rising demand for wood-based building materials also contribute to the segment's growth.

Biomaterials

Expected Growth: 4.5%

Stora Enso Oyj's biomaterials segment growth of 4.5% is driven by increasing demand for sustainable packaging, rising adoption of biodegradable materials, and growing use of renewable energy sources. Additionally, the company's focus on innovation, strategic partnerships, and expanding production capacity are contributing to its growth momentum.

Packaging Solutions

Expected Growth: 3.8%

Stora Enso Oyj's Packaging Solutions segment growth of 3.8% is driven by increasing demand for sustainable packaging, growth in e-commerce, and rising need for renewable and recyclable materials. Additionally, the company's focus on innovation and R&D, as well as its strategic acquisitions, have contributed to the segment's growth.

Forest

Expected Growth: 3.0%

Stora Enso Oyj's Forest segment growth is driven by increasing demand for sustainable packaging, rising global pulp prices, and strategic investments in forestry operations. Additionally, the company's focus on bioenergy and biomaterials, as well as its efforts to improve operational efficiency, contribute to the 3.0% growth rate.

Other

Expected Growth: 2.8%

Stora Enso Oyj's 2.8% growth in 'Other' segment is driven by increasing demand for sustainable packaging solutions, expansion into emerging markets, and strategic partnerships. Additionally, the company's focus on innovation and R&D investments in biomaterials and biocomposites contribute to its growth momentum.

7. Detailed Products

Paper Products

Stora Enso Oyj produces a wide range of paper products, including packaging paper, printing paper, and specialty paper.

Biomaterials

Stora Enso Oyj offers a variety of biomaterials, including lignin, cellulose, and hemicellulose, used in various industrial applications.

Wood Products

Stora Enso Oyj manufactures a range of wood products, including sawn timber, planed goods, and engineered wood products.

Packaging Solutions

Stora Enso Oyj provides innovative packaging solutions, including corrugated packaging, folding boxboard, and microflute.

Bioenergy

Stora Enso Oyj produces bioenergy products, including biofuels, biogas, and heat, from renewable biomass sources.

8. Stora Enso Oyj's Porter Forces

Forces Ranking

Threat Of Substitutes

Stora Enso Oyj operates in the paper and biomaterials industry, where substitutes are available, but not easily accessible. The company's products have a high level of customization, making it difficult for customers to switch to substitutes.

Bargaining Power Of Customers

Stora Enso Oyj has a diverse customer base, which reduces the bargaining power of individual customers. The company's products are also customized to meet specific customer needs, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Stora Enso Oyj relies on a few large suppliers for raw materials, giving them some bargaining power. However, the company's scale of operations and long-term contracts mitigate this risk.

Threat Of New Entrants

The paper and biomaterials industry has high barriers to entry, including significant capital requirements and environmental regulations. This makes it difficult for new entrants to compete with established players like Stora Enso Oyj.

Intensity Of Rivalry

The paper and biomaterials industry is highly competitive, with several large players competing for market share. Stora Enso Oyj faces intense competition from companies like UPM-Kymmene and Nippon Paper.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	32.14%
Debt Cost	4.15%
Equity Weight	67.86%
Equity Cost	7.78%
WACC	6.61%
Leverage	47.36%

11. Quality Control: Stora Enso Oyj passed 2 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Navigator

A-Score: 6.2/10

Value: 6.0

Growth: 4.8

Quality: 5.7

Yield: 10.0

Momentum: 1.0

Volatility: 9.7

1-Year Total Return ->

BillerudKorsnäs

A-Score: 5.0/10

Value: 7.3

Growth: 4.9

Quality: 4.6

Yield: 5.0

Momentum: 3.0

Volatility: 5.0

1-Year Total Return ->

Stora Enso

A-Score: 4.7/10

Value: 8.5

Growth: 1.3

Quality: 2.9

Yield: 5.6

Momentum: 6.0

Volatility: 3.7

1-Year Total Return ->

Holmen

A-Score: 4.6/10

Value: 4.3

Growth: 4.6

Quality: 5.9

Yield: 3.1

Momentum: 1.0

Volatility: 8.7

1-Year Total Return ->

Mondi

A-Score: 4.5/10

Value: 6.1

Growth: 2.0

Quality: 2.8

Yield: 10.0

Momentum: 1.0

Volatility: 5.0

1-Year Total Return ->

SCA

A-Score: 4.1/10

Value: 3.4

Growth: 1.8

Quality: 5.8

Yield: 3.1

Momentum: 1.5

Volatility: 8.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

41.56%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.61%

Stora Enso Oyj - FI0009005961

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on STERV

1.c. Company Highlights

Lower Growth

Lower Quality

Average Yield

Earnings Beats

Revenues Miss

Stable Momentum

Medium Volatility

Fairly Valued

Weak Momentum

Earnings Miss

Cheaper

Revenues Beats

2. Stora Enso's Q4 Results: A Resilient Performance Amidst Challenging Market Conditions

Segmental Performance

Guidance and Outlook

Valuation

Key Drivers

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.57%)

6. Segments

Packaging Materials

Expected Growth: 3.5%

Wood Products

Expected Growth: 3.2%

Biomaterials

Expected Growth: 4.5%

Packaging Solutions

Expected Growth: 3.8%

Forest

Expected Growth: 3.0%

Other

Expected Growth: 2.8%

7. Detailed Products

Paper Products

Biomaterials

Wood Products

Packaging Solutions

Bioenergy

8. Stora Enso Oyj's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Stora Enso Oyj passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11.36$

Current Price

11.36$

Potential

12.e Scoring ^Insights

12.f DCF ^BETA