Mercer, Cascades upgraded at CIBC as firm offers forestry and packaging outlook

As previously reported, CIBC analyst Hamir Patel upgraded Mercer (MERC) to Neutral from Underperformer with a $9 price target, up from $8, and upgraded Cascades (CADNF) to Outperformer from Neutral with a C$17 price target, up from C$14, citing revisions to the firm’s commodity outlook. Heading into 2024, the firm continues to favor the packaging names over wood/building products, and for Cascades it sees “significant earnings upside potential from even partial implementation of the containerboard industry’s ongoing pricing initiative.” With limited near-term downside risks to pulp prices, and potential for additional supply shocks if further capacity is permanently removed by other industry participants in Canada, the firm expects Mercer shares to perform in line with the broader forestry space, the analyst tells investors.