Paper & packaging - Interim results could point to inflection point in packaging sector

Davy Research
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Corrugated demand appears to have remained solid through H1 (+2%) and containerboard pricing is now stabilizing. The outlook for the European packaging sector is therefore improving. Despite the strong share price performance year-to-date (ytd), the sector continues to look cheap on an historic and absolute basis. We believe that the H1 results of Smurfit Kappa Group (SKG) and Mondi could prove to be a catalyst for a re-rating in both names and potentially for the sector.