Update shared on 09 Dec 2025
Fair value Decreased 0.32%Analysts have slightly reduced their price target for Sappi, trimming it by approximately $0.13 as they factor in somewhat slower expected revenue growth that is largely offset by modestly improved profit margin and valuation assumptions.
What's in the News
- UPM and Sappi announced an intended graphic paper joint venture that would combine UPM Communication Papers with Sappi Europe’s graphic paper business, aiming to improve growth, margins, and capital efficiency while reducing direct exposure to declining European and North American graphic paper markets (Key Developments).
- The joint venture, if approved by regulators, is expected to close by the end of 2026. The combined operations would be positioned to better serve faster growing markets from competitive, global production platforms (Key Developments).
- UPM outlined a strategic portfolio focused on renewable fibres, advanced materials, and decarbonization solutions, which are expected to benefit from growing end markets and support long term value creation alongside the planned joint venture with Sappi (Key Developments).
- Sappi’s board decided to suspend the dividend for fiscal 2025 in order to preserve cash, signaling a cautious capital allocation stance amid ongoing strategic initiatives (Key Developments).
Valuation Changes
- Fair Value Estimate edged down slightly from ZAR 38.77 to ZAR 38.64 per share, reflecting marginally softer growth expectations.
- Discount Rate decreased fractionally from 27.13 percent to 27.12 percent, indicating an almost unchanged risk assessment.
- Revenue Growth was reduced modestly from 3.01 percent to 2.72 percent, pointing to slightly slower anticipated top line expansion.
- Net Profit Margin improved from 4.50 percent to 4.80 percent, signaling a small uplift in expected profitability.
- Future P/E moved down from 10.55x to 10.0x, suggesting a modestly lower valuation multiple applied to forward earnings.
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