Stora Enso (SEOAY) AI Stock Analysis

37 Followers

Top Page

Stora Enso

(OTC:SEOAY)

51Neutral

Stora Enso's stock score reflects significant challenges in financial performance, with negative profitability and declining sales. Improvements in adjusted EBIT and operational efficiencies provide some optimism, but ongoing issues in certain divisions and high costs persist. The technical indicators and valuation suggest caution is warranted, balancing the positive outlook from recent earnings guidance.

Stora Enso (SEOAY) vs. S&P 500 (SPY)

Market Cap

$7.13B

Dividend Yield1.17%

Average Volume (3M)31.97K

Price to Earnings (P/E)―

Beta (1Y)0.79

Revenue Growth-3.63%

EPS Growth67.40%

CountryUS

Employees16,000

SectorBasic Materials

Sector Strength58

IndustryPaper, Lumber & Forest Products

Share Statistics

EPS (TTM)-0.16

Shares Outstanding613,067,600

10 Day Avg. Volume38,411

30 Day Avg. Volume31,972

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.75

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusHold

Number of Analyst Covering0

Stora Enso Business Overview & Revenue Model

Company DescriptionStora Enso (SEOAY) is a leading global provider of renewable solutions in packaging, biomaterials, wooden constructions, and paper. With its roots in Europe, the company operates in various sectors, including forestry, pulp, paper, and packaging. Stora Enso leverages its extensive expertise in wood and biomass processing to develop sustainable products and solutions for a wide range of industries.

How the Company Makes MoneyStora Enso makes money primarily through the sale of its diverse range of products and solutions derived from renewable resources. The company's revenue streams are driven by its key business segments: Packaging Materials, Packaging Solutions, Biomaterials, Wood Products, and Paper. In the Packaging Materials segment, Stora Enso produces and sells high-quality consumer board and industrial packaging materials. The Packaging Solutions segment offers innovative packaging designs and systems, catering to various industries such as retail, food and beverage, and logistics. The Biomaterials segment generates revenue through the production and sale of pulp and other biomass-based materials, which serve as raw materials for textiles, chemicals, and other industries. In the Wood Products segment, the company provides sustainable building solutions, including engineered wood products and construction systems. The Paper segment, while experiencing a decline due to digitalization, continues to contribute to revenue through the sale of paper products for printing and office use. Strategic partnerships and continuous innovation in renewable materials and technologies further bolster Stora Enso's revenue potential.

Stora Enso Financial Statement Overview

Summary

Stora Enso's financial performance shows a mixed picture. While the balance sheet remains strong with manageable leverage and a solid equity base, profitability issues are evident with negative net profit margins and inconsistent revenue growth. Cash flow management needs improvement due to negative free cash flow trends, although operational cash flow remains strong.

Income Statement

Neutral

Stora Enso's income statement reveals a challenging financial trajectory. The gross profit margin improved slightly in the latest period, but the net profit margin remains negative due to sustained net losses. Revenue growth has been inconsistent, showing a decline in recent years. EBIT and EBITDA margins indicate pressure on operating profitability.

Balance Sheet

Positive

The balance sheet of Stora Enso shows a reasonable debt-to-equity ratio, reflecting manageable leverage. However, the return on equity has turned negative, highlighting profitability issues. The equity ratio remains healthy, indicating a strong capital structure with a significant portion of assets financed by equity.

Cash Flow

Neutral

Stora Enso's cash flow statement highlights operational cash flow generation, but free cash flow is negative, pointing to high capital expenditures. The operating cash flow to net income ratio is strong, indicating good cash conversion despite net losses. Nonetheless, free cash flow trends need improvement for financial sustainability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
9.05B	9.40B	11.68B	10.16B	8.55B
	Gross Profit
3.57B	3.05B	5.15B	4.68B	3.85B
	EBIT
93.00M	-322.00M	2.01B	1.57B	922.00M
	EBITDA
603.00M	226.00M	2.52B	2.25B	1.52B
	Net Income Common Stockholders
-136.00M	-357.00M	1.55B	1.27B	626.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.02B	2.46B	1.92B	1.53B	1.66B
	Total Assets
19.80B	20.75B	20.92B	19.03B	17.43B
	Total Debt
5.73B	4.92B	3.92B	3.87B	4.75B
	Net Debt
3.73B	2.45B	2.00B	2.39B	3.09B
	Total Liabilities
9.81B	9.87B	8.42B	8.36B	8.64B
	Stockholders Equity
10.14B	10.98B	12.53B	10.68B	8.81B
Cash Flow		Free Cash Flow
-161.00M	-237.00M	878.00M	832.00M	467.00M
	Operating Cash Flow
952.00M	752.00M	1.58B	1.48B	1.13B
	Investing Cash Flow
-1.13B	-1.31B	-742.00M	-449.00M	-681.00M
	Financing Cash Flow
-301.00M	1.08B	-450.00M	-1.22B	354.00M

Stora Enso Technical Analysis

Technical Analysis Sentiment

Negative

Last Price8.70

Price Trends

50DMA

10.23

Negative

100DMA

10.17

Negative

200DMA

11.17

Negative

Market Momentum

MACD

-0.53

Positive

RSI

35.36

Neutral

STOCH

45.96

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SEOAY, the sentiment is Negative. The current price of 8.7 is below the 20-day moving average (MA) of 9.20, below the 50-day MA of 10.23, and below the 200-day MA of 11.17, indicating a bearish trend. The MACD of -0.53 indicates Positive momentum. The RSI at 35.36 is Neutral, neither overbought nor oversold. The STOCH value of 45.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SEOAY.

Stora Enso Peers Comparison

Overall Rating

UnderperformOutperform

Sector (48)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HMY	76 Outperform	$10.71B	18.27	25.19%	0.60%	20.35%	20.44%
BCPC	74 Outperform	$5.34B	41.79	11.66%	0.53%	3.39%	17.52%
EXP	72 Outperform	$7.55B	16.22	33.51%	0.44%	0.64%	-1.15%
UFPI	66 Neutral	$6.42B	15.59	12.80%	1.27%	-7.84%	-17.33%
X	57 Neutral	$9.26B	26.17	3.43%	0.48%	-13.48%	-56.94%
SEOAY	51 Neutral	$7.13B	―	-1.12%	1.17%	-3.63%	67.40%
Sector *	48 Neutral	$1.92B	-1.99	-22.85%	3.95%	0.94%	-27.31%

* Basic Materials Sector Average

Performance Comparison

SEOAY

Stora Enso

8.63

-4.40

-33.77%

BCPC

Balchem

161.31

18.26

12.76%

EXP

Eagle Materials

216.47

-27.38

-11.23%

HMY

Harmony Gold Mining

17.99

9.01

100.33%

United States Steel

41.82

2.89

7.42%

UFPI

UFP Industries

103.54

-6.86

-6.21%

Stora Enso Earnings Call Summary

Earnings Call Date: Feb 11, 2025 | % Change Since: -18.16% | Next Earnings Date: Apr 25, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook with significant improvements in adjusted EBIT and operational efficiencies, alongside challenges in sales decline and specific divisional performances. Efforts in sustainability and cost reductions were notable positives, but market volatility and high costs remain concerns.

Highlights

Significant Growth in Adjusted EBIT

In 2024, Stora Enso achieved a 75% year-on-year growth in adjusted EBIT, reaching €598 million. This was driven by improved sourcing, enhanced operational efficiency, and commercial excellence.

Reduction in Operating Working Capital

Operating working capital decreased by more than €700 million, reducing from over 14% to 7% of sales.

Fixed Costs Reduction

Fixed costs were reduced by €110 million, with total cost improvement actions offsetting wood cost escalation.

Dividend Increase

The Board proposed a dividend of €0.25 per share, up from €0.20 last year.

Progress in Sustainability Targets

Achieved a 53% reduction in Scope 1 and 2 emissions by the end of 2024, surpassing the target of 50% by 2030.

Lowlights

Decline in Full Year Sales

Full year sales declined by 4% to €9 billion, mainly due to capacity closures and divestments in 2023.

Challenges in Packaging Solutions

The Packaging Solutions division faced challenges with overcapacity and margin pressure, resulting in an adjusted EBIT loss of €6 million.

Wood Products Division Performance

Despite some improvement, the Wood Products division's adjusted EBIT remained negative at €12 million.

High Wood Fiber Costs

Significant increase in wood fiber costs throughout 2024, impacting profitability.

Company Guidance

In the fiscal year 2024, Stora Enso achieved a 75% year-on-year growth in adjusted EBIT, reaching €598 million, driven by improved sourcing, operational efficiencies, and commercial excellence despite challenging market conditions. Fixed costs were reduced by €110 million, with an overall decrease in operating working capital by over €700 million, bringing it down from 14% to 7% of sales. The company announced a dividend increase to €0.25 per share and plans to continue enhancing cost efficiency in 2025. Full-year sales declined by 4% to €9 billion due to capacity closures and divestments in 2023, but sales for continuing businesses increased by 1%. The new packaging board line in Oulu and strategic acquisitions, like the Finnish sawmill company Junnikkala, are key focuses for growth. Despite the subdued demand forecast, Stora Enso remains committed to improving financial performance and shareholder value.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.