Europe Paper & Forest Products Updating Estimates post 2Q26 and Marking to Market for Latest Commodity Price Movements

Equity Research 8 September 2026 | 6:44AM BST

EUROPE PAPER & FOREST PRODUCTS

Updating Estimates post 2Q26 and Marking to Market for Latest Commodity Price Movements

Following 2Q26 results, we update our estimates for SW, Mondi, SCA, UPM and Stora Gabriel Simoes | Enso. In general, we reflect a more positive environment for containerboard prices Goldman Sachs International into year-end across both the US and Europe, which we expect to start supporting Thomas Ward earnings in the latter part of 2026 and into 2027. For Pulp, we lower 2027 estimates | across the board given the downward trend in hardwood pulp prices we have Goldman Sachs International observed since July and in softwood pulp prices since the beginning of the year. We Marcus von Scheele | also roll forward our valuation year to 2027/28E across the names. Goldman Sachs International Still solid momentum for EU Containerboard. We highlight that we expect Meghna Ghosh | European containerboard players to post strong results in the near term, as we still Goldman Sachs India SPL see elevated gas prices supporting testliner (and, hence, kraftliner) price increases in the region. With that, we believe price vs. cost should be very favorable for our containerboard producers (namely SCA, Mondi and Stora Enso) - which are mostly exposed to kraftliner.

We don’t believe pulp prices have hit their bottom. Although we have seen some investor optimism over the price hikes announced by pulp producers, we don’t believe this is the beginning of a more sustainable rally for prices, but rather a pause in the downcycle. We still expect the pressured supply/demand scenario, with capacity starting up in China and Indonesia in the coming months to put pressure on prices ahead. As highlighted recently by our LatAm P&P team (here and here), we advise investors to pay close attention to paper and wood prices in China, as higher prices in either front could support the implementation of the pulp price hikes announced and a potential mini upcycle.

We remain more constructive on the downstream vs. the upstream names. Following the update of our estimates, we highlight Smurfit Westrock (Buy) as better positioned vs. the rest of the coverage given the company’s exposure to the US containerboard market - where we see reasons to be more bullish structurally. We remain more negative on Stora Enso (Sell) given our more conservative view for the pulp and consumerboard markets into 2027.

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Goldman Sachs Europe Paper & Forest Products

Smurfit Westrock: Containerboard Strength Improving 2027 Numbers

We update our estimates for Smurfit Westrock following 2Q26 results (July 29), also reflecting the latest FX trends and marking-to-market for our latest views on commodity prices. 2Q26 Adj. EBITDA came in at $1,140mn, -1% vs. Visible Alpha Consensus Data whilst the company lowered FY EBITDA guidance to $4.9-5.1bn on the expectations of higher freight and energy costs (+$300mn/+$220mn vs. 2025, respectively). For FY26 we now expect Adj. EBITDA of $4.99bn (from $5.11bn prior and vs. consensus at $4.98bn).

Our revised EBITDA estimates now sit +0%/+6%/+2% vs. 2026/27/28 Visible Alpha Consensus Data. While we trim our FY26 adj. EBITDA expectations by 2%, reflecting the higher input costs feeding through the P&L ahead of the offsetting benefit from announced pricing implementations, these same dynamics position us 6% above consensus for FY27, where we see price increases in the US proving durable underpinned by attractive US containerboard market dynamics following intense consolidation in 2025.

We maintain our Buy rating. After incorporating our new forecasts and rolling forward our valuation…