UPM-Kymmene Kept at Hold as Berenberg Notes 'Tough' Q2

06:36 AM EDT, 07/28/2026 (MT Newswires) -- Berenberg reiterated UPM-Kymmene (UPM.HE)'s hold rating as analysts noted a sell-off in the Finnish forest products maker's shares following a "tough set" of second-quarter results. "The sell-off, in our view, was primarily due to persistent headwinds to pulp prices (group pricing made minimal contribution to yoy EBIT growth) and UPM's lacklustre H2 adjusted EBIT guidance of EUR375m-575m (H1: EUR471m), which we think could trigger c10% cuts to consensus," the research firm said Tuesday. Berenberg lowered its sales forecasts for 2026 through 2028, reflecting the deconsolidation of the plywood business. EPS estimates were also cut across the three-year period, partly due to lower price-cost spreads amid ongoing headwinds in the pulp market. Against this backdrop, the stock's price target was raised to 23.50 euros from 22.50 euros. "Shares trade on over 10x 2026 EV/EBITDA, having re-rated from 8-9x in late 2025/early 2026 on corporate actions (eg the graphic paper JV with Sappi, followed by announcement of a plywood spin-out) and enthusiasm for the stock's exposure to biofuels. The absence of meaningful upgrades to consensus owing to persistent Chinese competitive headwinds in pulp, however, leaves valuation full, in our view," Berenberg added.