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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.

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1.b. Last Insights on STERV

Stora Enso Oyj's recent performance was driven by its interim report for January-September 2025, which highlighted good progress in a challenging market environment. The company's Q3 adjusted operating profit was impacted by the Oulu ramp-up, but sales edged up 1% to €2.28bn, driven by the Junnikkala acquisition and the Oulu ramp-up. Management targets profitability within three years, with earnings projected to grow 39.52% annually, outpacing broader market growth expectations. The company guides for profitability by 2027.

1.c. Company Highlights

2. Stora Enso's Q3 2025 Earnings: A Mixed Bag

Stora Enso reported an adjusted EBIT of EUR 126 million for Q3 2025, with EPS coming in at EUR 0.26, significantly beating estimates of EUR 0.07. The company's revenue growth was stagnant, but it managed to maintain its margins in a challenging market environment. The reported EPS was a positive surprise, driven by a EUR 140 million gain from the sale of a 12% stake in its Swedish forest land.

Publication Date: Oct -26

📋 Highlights
  • Forest land divestment: sold 12.4% of Swedish forest holdings (175,000 hectares) for SEK 9.8 billion (~EUR 900 million), reducing net debt by EUR 800 million.
  • Adjusted EBIT: at EUR 126 million, comparable to prior year excluding EUR 45 million Oulu ramp-up impact, with full-year EBIT drag of EUR 120–140 million expected.
  • Net debt ratio: improves to 2.7x LTM EBITDA, driven by asset sales and disciplined capital allocation amid strategic focus on industrial operations.
  • Oulu mill ramp-up delays: project EUR 15–35 million Q4 EBIT drag, with capacity target of 750,000 tonnes expected to be fully realized by 2027.
  • Cost savings: exceed EUR 200 million achieved, with fixed costs down EUR 38 million in Q3 and CapEx expected to decline from >EUR 1 billion to mid-EUR 700 million range.

Operational Highlights

The company's operational performance was mixed, with the Oulu consumer board line ramp-up progressing slower than initially anticipated, resulting in an EBIT impact of EUR 45 million. However, the company's cost-saving programs have made progress, with over EUR 200 million in savings already achieved. The Oulu mill is expected to be fully ramped up by 2027, with 750,000 tonnes of capacity.

Balance Sheet Strengthening

Stora Enso's net debt decreased by almost EUR 800 million to EUR 3.2 billion during the third quarter, reflecting the positive impact of the forest asset divestment. The ratio of net debt to the last 12 months adjusted EBITDA is now at 2.7x. This strengthening of the balance sheet should provide the company with the financial flexibility to navigate the challenging market conditions.

Valuation and Outlook

With a P/E Ratio of -67.24 and an EV/EBITDA of 9.32, the market is pricing in a challenging outlook for the company. However, the company's focus on cost savings and its strategic review of its remaining Swedish forest assets, including a potential demerger and public listing, could unlock shareholder value. Analysts estimate next year's revenue growth at 4.2%, which could provide a positive catalyst for the stock.

Strategic Review and Capital Allocation

The company's strategic review of its Swedish forest assets and potential demerger could allow it to focus on its industrial activities and unlock shareholder value. Stora Enso's CEO, Hans Sohlstrom, notes that the company can operate its assets on a competitive level from a wood supply standpoint, maximizing profitability. The company's capital allocation strategy is expected to be more disciplined, with a focus on return criteria and structured allocation.

3. NewsRoom

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Stora Enso announces early redemption of entire EUR 500 million 2026 bond

Dec -02

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Stora Enso (HLSE:STERV): Assessing Valuation After Recent Steady Gains

Nov -29

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Stora Enso refocuses reporting on core packaging business

Nov -25

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Stora Enso's new reporting structure and financial targets

Nov -24

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Stora Enso initiates a strategic review of its Central European sawmills and building solutions operations (Inside information)

Nov -14

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Changes in Stora Enso's Group Leadership Team

Nov -14

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Stora Enso completes strategic review and intends to create the largest listed pure play forest company in Europe (Inside information)

Nov -14

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Stora Enso (HLSE:STERV) Unprofitable for Five Years but Guides for Profitability by 2027

Oct -24

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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

Strength

Weaknesses

Opportunities

Threats

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

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Navigator

A-Score: 6.5/10

Value: 6.4

Growth: 4.8

Quality: 5.7

Yield: 10.0

Momentum: 2.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
BillerudKorsnäs

A-Score: 4.8/10

Value: 7.9

Growth: 4.9

Quality: 5.0

Yield: 5.6

Momentum: 0.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Holmen

A-Score: 4.6/10

Value: 4.1

Growth: 4.6

Quality: 6.2

Yield: 3.1

Momentum: 1.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
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 ->

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Stock-Card
SCA

A-Score: 4.2/10

Value: 3.6

Growth: 1.8

Quality: 6.6

Yield: 2.5

Momentum: 2.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Stora Enso

A-Score: 3.7/10

Value: 8.3

Growth: 1.3

Quality: 2.1

Yield: 6.2

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.3$

Current Price

10.3$

Potential

-0.00%

Expected Cash-Flows