DAVY VIEW

Smurfit Kappa Group’s valuation is implying a slowdown in profits and cashflow. However, the corrugated pricing and volume environment remains remarkably resilient, providing upside risk to 2019 forecasts and increased confidence in our 2020 estimates. The performance of the company suggests that historic correlation with economic uncertainty has been broken. It may now also be time for traditional valuation perceptions to be changed. The case for a re-rating remains compelling.