||EPS - Basic
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Smurfit Kap. Share Discussion Threads
Showing 501 to 523 of 525 messages
|Not exactly the share price reaction I would have expected following the announcement of the promotion to the FTSE100. What's going on here?|
|'Being added to the FTSE 100 would force fund managers who track the benchmark to buy £110 million (€128.6 million) worth of shares in the company.'
|should easily get to 20 stg
Fair valuation though in line with peers is more 23-24!|
|Nice open. Hopefully we should see some price action today with punters getting in early before the FTSE rebalance.|
|yip - seems to be in. To be confirmed tomorrow.
This should bring the company on the radar of more analysts and institutional holders so hopefully the low valuation will be spotted and will bring about a more average valuation|
|Looks like SKG will enter the FTSE 100 next month based on the closing mkt cap today. Should hopefully attract interest from tracker funds. Let's wait and see!|
|A puzzle...as usual.....zzzzzzz|
|Down 3% today. Why the drop?|
|6-Eurocent Beat vs. VRP, Operations In-Line – This morning, Smurfit Kappa reported EPS from operations of €0.56, beating our €0.50 estimate by 6-euro cents and outperforming consensus expectations by 3-eurocents. Versus our model, the operating lines combined performed as we expected, with Europe falling 2-eurocents short while the Americas beat by 2-eurocents. All of the overall EPS outperformance in SKG’s third quarter came from the non-operating lines, as lower interest expense, lower corporate expense and a lower tax rate than expected each added 2-eurocents versus our model.
OCC Continues to Be Big Story – On the company’s quarterly investor call, OCC price movements accounted for nearly half the questions asked. As a reminder, Europe experienced a spike in OCC costs in September, which the industry tried to raise test linerboard prices on the back of. However, over the last several weeks OCC prices have begun to fall again and the recycled board price hike has withered and basically failed. We believe the recent decline in OCC is normal as we enter the high generation season (aka Christmas). Furthermore, higher prices lead to higher generation levels as it pays to sort OCC from mixed paper. Stepping back, we believe the near-term downward movements in OCC are only temporary and continue to hold on to our belief that OCC prices are headed higher (and potentially significantly higher) in the long term as little-to-no new net virgin board capacity is added to the supply chain and demand for containerboard continues to grow.
Little Further Testliner Pricing Seen Through 2017 – Though Smurfit (and the industry) partially blamed moderating OCC costs for the failed European testliner increase, we believe the true driving factor was too-high a level of board inventories in the system combined with new recycled fiber-based containerboard machines coming online. As this new capacity finds its way into the market, we believe the market will, at a minimum, remain balanced at current prices and could become more competitive as producers fight for share. On the other hand, we are slightly more optimistic on kraft (or virgin) board pricing. With US domestic containerboard prices going higher, we believe US export prices have some potential to rise, which has the potential to help lift kraftliner pricing in Europe in 2017. We do note that we don’t model any significant rise in kraftliner pricing in Europe into 2017 at this time.
Raising Target €1 as We Roll Numbers – We are not changing our full year estimates, and thus are maintaining our €2.00, €2.15 and €2.40 EPS expectations for 2016, 2017 and 2018, respectively. We are raising our one-year price target to €28 and maintain our Buy rating. However, we continue to question why the stock is trading at such a discount to its peers. On our numbers, SKG continues to trade at a one-turn EV/EBITDA discount to all of its US peers except IP (which we also believe is far too low). Versus its European competitor DS Smith, we calculate a 2-turn EV/EBITDA discount. While Smurfit Kappa does have more debt than most European investors prefer, at a 2.4x leverage ratio, the company’s debt level is not egregious and we would rate it as properly levered given the strong and stable free cash flow generation -- particularly given how cheap debt is versus equity. Though not yet rated a “top pick” due to the fundamental environment in Europe being softer than the US market, the stock is still extremely cheap and we recommend investors continue to build a position in the company.
Looking at Smurfit-Kappa on purely a valuation basis, we come to the conclusion that the stock is attractive, and thus our €28 target price and Buy rating. However, we also believe that the stock could continue to struggle in the near future if macro conditions in Europe soften. On the other hand, we believe the company is making significant headway in improving their margins in the European region and box pricing in the region is likely to head higher as the Euro continues to be weak versus the US Dollar. Furthermore, the company has shown itself as a savvy acquirer and we believe there is potential for the company to grow through acquisitions. Finally, if the company does not grow significantly or lever-up with a significant share buyback, we could see the company taken over, though the probability of such an event is diminishing in our opinion. Should the European region improve, should the company make another acquisition like Orange County or should the company be a target for acquisition themselves, there could be significant upside to our estimates.|
|This is bound to be very attractive at the moment to US institutional investors....|
|These results should bring the share price to 20.00 after that lets see|
|Agreed - hopefully a re-rating of sorts going fwd (barring obvious macro blah blah)|
|yep great results|
|I have consensus earnings growth from brokers showing minus 11% for the whole of this year which is clearly wrong by some margin. These figures look good to me and every good year of cash flow strengthens the balance sheet. Bit of a drab week on the markets in front of the US election but SKI should progress from here.|
|Great results - on for record highest ever ebitda! And net debt down to 2.4 times ebitda
This has got to be rerated now..|
|looks like the market is fearing the worst from the results die tomorrow...
any positive numbers should see a good upwards movement|
|A right mauling today - fair vols too.........zzzzzzzzzz|
|I think that Blackrock have been dumping stock although not sure why. Big dollar earner here reporting in euros. Cant be all bad!|
|Jefferies International downgrade to Hold
TP from 2,350.00 to 1,915.00|
|surprising weakness recently....any reason ?|
|H/T FT AV
Cash is King: Upgrade to Buy We think investors now need to recognise SKG’s strong free cash generation and the potential equity value release this could afford even in bearish scenarios – with a sector-leading FCF yield, we upgrade the shares to Buy. Self-help investments have been made in recent years and we see capex falling materially in 2017E which could result in a 30% FCF CAGR over 2016-18E. Our revised 12m DCF-derived PO represents c17% potential upside, with the de-gearing opportunity likely driving further upside out to 2018E.
Solid cash flow. Capex falling = cash flow getting better yet Cash flow has been strong historically and while a new capex programme is to be
established in ‘17E, management has indicated capex will fall to 100% of depreciation in
17E. Investors are thus likely to see a meaningful uplift in FCF (c45% y/y in 17E, on our
estimates). Our scenario analysis suggests that just by virtue of strong cash generation,
even if Smurfit were to see no earnings growth and merely hold its EV/EBITDA multiple,
a valuation of EUR29.93 by 18E could be possible – as net debt shrinks and the equity
portion of SKG’s EV expands.
OCC climbing; containerboard improving. Pricing looks good We are increasingly seeing signs of optimism in recycled containerboard markets. Key
players are announcing price increases and OCC prices are rising strongly. SKG is leading
the pack – recently announcing a €40/ton testliner increase in Europe effective 12th
September. We estimate that the annualized impact if successful would be a c10% uplift
to EBITDA. We see a good chance of success given the cost-push from OCC Prices
which have been on a sharply rising trend in recent weeks and are currently +17% YTD.
Best in class FCF yield. Screens well on range of metrics In our view the shares currently offer amongst the most attractive FCF yield in the
sector at c10.1% over 2016-19E – and arguably the best FCF yield value when
considering the yield in the context of downside risks and future growth prospects (both
areas in which it arguably scores more highly than the few peers with higher FCF yields).|
|Merrill upgrade to Buy this am.
|this is still only 24 Euros when it hit over 27.5 Euros within the last 12-18 months so still headroom here
US markets open today after Labour Day yesterday - so I expect a strong afternoon on the back of GS note|