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Feb 13 2024, 09:40 GMT
Paper & Packaging
400p DS Smith offer gives 15% Mondi EPS accretion
- Sectors : Paper & Packaging
- Companies : Stora Enso | SCA | Mondi | UPM | Huhtamaki | DS Smith | Smurfit Westrock
Ratings
Ratings and price correct at time of issue
| Company | Rating | Date | Previous Rating | Date | Closing Price |
|---|---|---|---|---|---|
| DS Smith | OUTPERFORM | 23/01/23 | Neutral | 03/04/19 | 320p |
| Huhtamaki | OUTPERFORM | 04/10/23 | Neutral | 03/04/23 | 3812c |
| Mondi | NEUTRAL | 05/05/20 | Outperform | 19/06/12 | 1360.5p |
| SCA | OUTPERFORM | 04/10/23 | Neutral | 03/04/23 | 14120 |
| Smurfit Westrock | OUTPERFORM | 30/06/09 | N/A | N/A | 3742c |
| Stora Enso | NEUTRAL | 24/07/23 | Outperform | 10/05/23 | 1132c |
| UPM | OUTPERFORM | 03/04/23 | N/A | N/A | 2927c |
DAVY VIEW
Mondi has confirmed merger discussions with packaging peer DS Smith. With Mondi trading at over a 60% CY24E P/E premium to DS Smith, our merger analysis (see page 4) indicates that Mondi could offer £4.00/share for DS Smith while delivering 15% Mondi FY25E EPS accretion, assuming €200m merger synergies. Mondi will report FY23E results on February 22nd, and DS Smith will issue a Q3 FY24E update on March 6th. Pending merger terms, we reaffirm our ‘Outperform’ view on DS Smith and ‘Neutral’ view on Mondi.
