Stora Enso (SEOAY) AI Stock Analysis

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Stora Enso

(OTC:SEOAY)

49Neutral

Stora Enso's overall score reflects financial pressures with declining revenues and profitability, despite strategic efforts to improve operational efficiency. Technical indicators suggest a bearish trend, and the valuation is unattractive. Earnings call highlights positive growth and expansion efforts, but challenges persist.

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

Market Cap

$7.42B

Dividend Yield0.65%

Average Volume (3M)17.36K

Price to Earnings (P/E)―

Beta (1Y)0.80

Revenue Growth3.54%

EPS Growth79.99%

CountryUS

Employees19,000

SectorBasic Materials

Sector Strength63

IndustryPaper, Lumber & Forest Products

Share Statistics

EPS (TTM)0.15

Shares Outstanding613,067,600

10 Day Avg. Volume0

30 Day Avg. Volume17,357

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

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 Oyj provides renewable solutions for the packaging, biomaterials, wooden constructions, and paper industries worldwide. It operates through Packaging Materials, Packaging Solutions, Biomaterials, Wood Products, Forest, Paper, and Other segments. The company's Packaging Materials segment offers virgin and recycled fiber renewable and recyclable packaging materials for food and drink, pharmaceutical, and transport packaging. Its Packaging Solutions segment develops and sells fiber-based packaging products and services, including corrugated, carton board and other converting products, design services, automation solutions, and formed fiber and wood foams for various market sectors, such as store retail, e-commerce, and industrials. The company's Biomaterials segment provides various pulp grades for paper, board, tissue, textile, and hygiene product producers; and tall oil and turpentine from biomass. Its Wood Products segment offers wood-based solutions, including digital tools for designing of building projects; sawn woods; and pellets for sustainable heating, as well as applications for windows, doors, and packaging industries. The company's Forest segment engages in sustainable forest management, as well as supplies wood. Its Paper segment provides paper products for print and office use. The company's Other segment holds an interest in Pohjolan Voima Oy, a company that produces electricity and heat. It serves packaging manufacturers, brand owners, paper and board producers, publishers, retailers, printing houses, converters, joinery, and construction companies. The company was incorporated in 1996 and is headquartered in Helsinki, Finland.

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 faces declining revenue, profitability challenges, and negative cash flows. Despite a stable balance sheet with low leverage, negative earnings and cash flow trends indicate financial pressures.

Income Statement

Neutral

The income statement shows a decline in revenue and profitability. The TTM data reflects a gross profit margin of approximately 34.7%, but a negative net profit margin of -1.03%, indicating a loss in the period. Revenue growth is negative when compared to the previous year's revenue. Both EBIT and EBITDA margins have declined over time, suggesting operational challenges.

Balance Sheet

Neutral

The balance sheet indicates a relatively stable equity position, with a debt-to-equity ratio of about 0.18 in the TTM period, showing low leverage. However, return on equity is negative due to net losses. The equity ratio is approximately 51.5%, suggesting a balanced asset financing structure, but the declining equity and asset base could pose future risks.

Cash Flow

Neutral

The cash flow statement highlights a negative free cash flow in the TTM period, despite a positive operating cash flow. The operating cash flow to net income ratio is negative due to net losses, indicating a disconnect between earnings and cash generation. Free cash flow growth is also negative, reflecting ongoing cash outflows.

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

Neutral

Last Price9.51

Price Trends

50DMA

9.65

Negative

100DMA

10.05

Negative

200DMA

10.82

Negative

Market Momentum

MACD

-0.01

Negative

RSI

56.31

Neutral

STOCH

76.82

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SEOAY, the sentiment is Neutral. The current price of 9.51 is above the 20-day moving average (MA) of 9.04, below the 50-day MA of 9.65, and below the 200-day MA of 10.82, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 56.31 is Neutral, neither overbought nor oversold. The STOCH value of 76.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SEOAY.

Stora Enso Peers Comparison

Overall Rating

UnderperformOutperform

Sector (49)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BCPC	78 Outperform	$5.34B	38.97	11.94%	0.53%	3.76%	18.06%
EXP	76 Outperform	$7.67B	16.79	33.51%	0.43%	0.64%	-1.15%
HMY	76 Outperform	$9.68B	16.10	25.19%	0.91%	20.35%	20.44%
UFPI	68 Neutral	$5.96B	16.44	11.33%	1.36%	-6.06%	-24.97%
X	61 Neutral	$9.57B	145.59	0.86%	0.48%	-14.79%	-88.78%
Sector *	49 Neutral	$1.95B	-1.21	-21.28%	3.72%	1.18%	-30.47%
SEOAY	49 Neutral	$7.42B	―	-0.87%	0.65%	3.54%	79.99%

* Basic Materials Sector Average

Performance Comparison

SEOAY

Stora Enso

9.51

-4.45

-31.88%

BCPC

Balchem

164.55

8.93

5.74%

EXP

Eagle Materials

230.23

-37.82

-14.11%

HMY

Harmony Gold Mining

15.77

6.66

73.11%

United States Steel

42.43

4.55

12.01%

UFPI

UFP Industries

97.37

-19.39

-16.61%

Stora Enso Earnings Call Summary

Earnings Call Date:Apr 25, 2025

(Q1-2025)

% Change Since: 5.20%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Neutral

Stora Enso reported solid financial performance with growth in sales and EBIT, alongside strategic expansions and organizational restructuring. However, challenges remain with high fiber costs, ramp-up expenses at the Oulu mill, and cash flow deficits. While the company is making progress on operational efficiencies and strategic growth, certain financial pressures persist.

Q1-2025 Updates

Positive Updates

Sales and EBIT Growth

Sales grew by 9% to €2.4 billion, and adjusted EBIT increased by 18% to €175 million with a 7.4% EBIT margin.

Operational Efficiency

Operating working capital decreased by 3 percentage points to 7%, marking the fourth consecutive quarter of year-over-year improvement.

Positive EBIT Across All Divisions

For the first time since Q3 2022, all divisions achieved positive adjusted EBIT.

Oulu Mill Expansion

Successful production start of the new consumer board line at the Oulu mill, expected to reach full capacity by 2027, representing a key strategic expansion.

Organizational Restructuring

Implementation of a new leaner and flatter organizational structure with 7 P&L responsible business areas to enhance efficiency and focus on renewable packaging.

Strategic Acquisition

Regulatory approval to acquire Finnish sawmills, Junnikkala, enhancing synergies and reducing wood costs.

Negative Updates

Oulu Ramp-Up Costs

Adjusted EBIT for full year 2025 is expected to be adversely impacted by approximately €100 million due to the ramp-up of the new packaging board line.

High Fiber Costs

Fiber costs, primarily from wood, increased significantly, negatively impacting results with a total negative impact of €131 million in the quarter.

Packaging Solutions Challenges

Continued price pressure due to market overcapacity and oversupply, although a turnaround in performance is underway.

Cash Flow Deficit

Cash flow after investing activities was negative at €47 million, driven by high capital expenditure and working capital increase.

Company Guidance

During Stora Enso's First Quarter 2025 Results Presentation, CEO Hans Sohlström and CFO Niclas Rosenlew provided comprehensive guidance on the company's performance and strategic initiatives. The company reported a 9% increase in sales, reaching €2.4 billion, and an 18% rise in adjusted EBIT to €175 million, with an EBIT margin of 7.4%. Operating working capital decreased by 3 percentage points to 7%, marking the fourth consecutive quarter of year-over-year financial improvements. The successful start-up of a new consumer board line at the Oulu mill was highlighted, alongside the regulatory approval for acquiring Finnish sawmills, Junnikkala, which is expected to enhance operational synergies. A new organizational structure, effective July 1, will focus on renewable packaging, with 7 P&L responsible business areas replacing the previous structure. This reorganization aims to decentralize P&L responsibility, improve efficiency, and strengthen the performance culture. Despite concerns about U.S. tariffs, sales to the U.S. constitute less than 3% of total sales, minimizing the impact. The company remains optimistic about redirecting U.S.-bound sales to other markets if necessary. Stora Enso expects a €100 million negative EBIT impact in 2025 due to the Oulu mill ramp-up, primarily affecting Q2, but anticipates reaching EBITDA breakeven by year-end.

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.