Mondi share price finds support in BoA Merrill Lynch upgrade

on Dec 18, 2013
Updated: Oct 21, 2019
Listen, Wednesday, December 18: Shares in Mondi Plc (LON:MNDI) have advanced slightly in London and Johannesburg today, after an upgrade by Bank of America Merrill Lynch. Goldman Sachs however lowered its price target on the paper and packaging group.

As of 14:24 UTC, shares in Mondi had added 0.21 percent to 962.00p in London after having climbed 0.6 percent earlier in the session. Mondi’s share price is about 45 percent up on the year. In Johannesburg, where the company’s shares have surged some 75 percent over the past year, Mondi’s share price has gained just above one percent so far today.

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**BoA Merrill Lynch upgrades Mondi to ‘buy’**
Reuters reported today that Bank of America Merrill Lynch had upgraded its rating on Mondi from ‘neutral’ to ‘buy’ arguing that the overall paper and packaging sector would grow in 2014.
“We expect further recovery in 2014 and average EPS (earnings per share) growth of 27 percent,” the investment bank said in a research note, as quoted by Reuters. The bank also maintained its buy rating on rival packaging group Rexam (LON:REX).

Analyst Ratings Network reports that Bank of America raised its price target on Mondi, from 1,084p to 1,1168p. By contrast, Goldman Sachs analysts today lowered their price target on the packaging group from 1,356p to 1,242p while maintaining their neutral rating.

Mondi has been the subject of a number of other recent research reports, with Davy Research analysts reiterating an ‘outperform’ rating on Mondi’s shares yesterday. Credit Suisse also reiterated its ‘outperform’ rating on the stock on Monday, with the news sending the company shares 4.1 percent up to 945.8p.
“We reiterate our view to buy European containerboard exposure on weakness and see Mondi, in particular, as clearly oversold,” the Financial Times quoted Credit Suisse as saying.

**Results update**
Mondi, South Africa’s biggest packaging company, updated markets on its third-quarter performance last month, posting underlying operating profit of €172 million (£105 million), 25 percent up year-on-year. The group attributed its Q3 profit growth to improved market conditions in its Packaging Paper business and South Africa division and to benefits from acquisitions completed toward the end of 2012.

“The current low-growth environment, coupled with increased competition in certain areas of the business presents some challenges going into the new year,” Mondi said in a statement. “The outlook for 2014 remains dependent on the nature and extent of the macroeconomic recovery and related demand for the group’s key products.”
Mondi is scheduled to publish its full-year results at the end of February next year.
**As of 14:46 UTC, buy Mondi shares at 961.50p.**
**As of 14:46 UTC, sell Mondi shares at 960.50p.**

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