2023-12-01 15:00:34
Itaú BBA downgraded its recommendation for Klabin from ‘neutral’ to ‘sale’, saying it expects a more difficult year 2024 for the paper manufacturer.
The bank also reduced the target price for the share from R$24 to R$22, which implies a 3% downside in relation to Thursday’s closing price.
Klabin’s shares fell 4.5% this morning.
According to analyst Daniel Sasson, although the cellulose market’s prospects have improved for 2024, Klabin’s results are expected to worsen in the annual comparison.
The starting point for the pulp price is around US$650 per ton, but cost inflation is expected to remain persistent for Klabin, which should increase the marginal production cost to US$550 per ton.
Therefore, Itaú redid the accounts and now sees an EBITDA of R$6.5 billion next year – a reduction of 6% in relation to the bank’s previous estimate.
In Itaú’s accounts, Klabin trades at 7.8x the estimated EBITDA for next year and at a free cash flow yield of 2% from 2024 to 2026.
Another point that concerns Itaú and the rest of the sellside are the changes in capex announced by Klabin yesterday at its Investor Day.
Klabin announced a postponement of R$900 million in capex from 2024 to 2025. Now, the company intends to invest R$4.5 billion next year. This was possible, said the CFO, because the company was able to postpone payments.
On the other hand, resources destined to the purchase of standing wood jumped from R$400 million this year to R$1 billion in 2024 – and the company confirmed that this capex will stabilize at this higher level until 2028, something well above projections .
Klabin’s shares rose 9% in the last 12 months. The company is worth R$24.4 billion on B3.
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