DS Smith - Reducing forecasts to reflect higher costs; pricing dynamics key for earnings progress

Davy Research
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DS Smith’s positive commentary around pricing provided the sector with a long-awaited filip last week. If containerboard prices stabilise/increase over the summer, the sector should continue to re-rate. With the company’s growing leverage remaining a concern, we retain our ‘Neutral’ rating. If pricing turns positive, however, DS Smith’s attractive valuation should provide decent upside potential.