SUZB3: Share Repurchases And Dividends Will Support Future Upside Potential

Analysts have nudged their Suzano price target slightly higher to reflect updated assumptions around a fair value of R$69.36, a lower discount rate, and modest adjustments to revenue growth, profit margin, and future P/E expectations.

What's in the News

Suzano S.A. announced a share repurchase program for up to 40,000,000 shares. Repurchased shares may be held in treasury, canceled, or later sold. The program will be funded using available profit and capital reserves, as well as realized profit for the period ended December 31, 2025, over a maximum term of 18 months (company announcement).
The Board of Directors authorized a buyback plan on February 10, 2026, which reinforces the previously announced share repurchase framework (Board of Directors meeting).
A new fluff pulp production line at the Limeira unit in Sao Paulo state has started operations. The BRL 490m investment increases total fluff pulp capacity from 100,000 tonnes per year to 440,000 tonnes per year, using a converted flexible machine for both Eucafluff and market pulp (company operational update).
The Board approved interim dividends totaling BRL 1.38b, or BRL 1.11658725 per share, to be paid on February 4, 2026. Shares will trade ex dividend from December 19, 2025, and the amount will be allocated to the minimum mandatory dividend for the 2025 fiscal year (Board of Directors meeting).
ISN reported that Suzano selected ISNetworld as its primary contractor information management platform to support safety and compliance oversight across its North American sites (ISN announcement).

Valuation Changes

Fair Value: R$69.18 to R$69.36, a small upward adjustment in the modeled fair value per share.
Discount Rate: 26.71% to 25.32%, indicating a modest reduction in the rate used to discount future cash flows.
Revenue Growth: 8.78% to 9.54%, reflecting slightly higher modeled top line growth assumptions in R$ terms.
Net Profit Margin: 11.02% to 11.09%, a very small change in expected profitability on R$ revenue.
Future P/E: 23.76x to 22.93x, a slight decrease in the multiple applied to projected earnings.

Suzano's strategic initiatives, including its U.S. packaging incorporation and CapEx plans, are expected to enhance future value creation and earnings.
Favorable pulp prices and strong demand, especially in Brazil, are projected to improve revenue and net margins by 2025.
Uncertain global conditions and integration challenges could impact Suzano's revenue, margins, and earnings amid demand and FX volatility.

Catalysts

About Suzano

Produces and sells eucalyptus pulp and paper products in Brazil and internationally.What are the underlying business or industry changes driving this perspective?

Suzano's incorporation of Suzano Packaging U.S. is expected to lead to better pricing and cost synergies, positively impacting revenues and margins by 2025.
Higher demand for pulp, coupled with favorable pulp prices announced in early 2025, is anticipated to boost both revenue and net margins.
The operational excellence and record production levels at the Ribas facility in 2024 are expected to keep production costs low, benefiting overall earnings.
Strategic initiatives like the industrial turnaround and new CapEx plans for Suzano Packaging are anticipated to drive higher future value creation and earnings.
Strong demand in the Brazilian market for certain paper lines is expected to boost revenue growth in 2025, with positive spillover effects on net margins.

Suzano Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Suzano's revenue will grow by 9.4% annually over the next 3 years.
Analysts assume that profit margins will increase from 15.3% today to 15.6% in 3 years time.
Analysts expect earnings to reach R$10.4 billion (and earnings per share of R$8.15) by about September 2028, up from R$7.8 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting R$14.6 billion in earnings, and the most bearish expecting R$8.2 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 18.2x on those 2028 earnings, up from 8.2x today. This future PE is greater than the current PE for the BR Forestry industry at 8.2x.
Analysts expect the number of shares outstanding to decline by 0.27% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 27.03%, as per the Simply Wall St company report.

Suzano Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Uncertain global economic conditions, as well as industry-specific challenges, could impact Suzano's revenue and earnings projections by causing fluctuations in demand for its products.
The integration and turnaround of Suzano's new U.S. packaging assets, as a result of the Pactiv Evergreen acquisition, have uncertainties that could affect Suzano's net margins if expected synergies don't materialize.
Potential challenges in servicing all markets due to low inventory levels and unexpected supply disruptions could impact revenue growth, especially in Middle Eastern, African, and Asian markets.
Any adverse changes in the FX market could lead to unfavorable financial impacts, potentially affecting earnings stability and predictability.
The competitive dynamics in China, including the closure or operation challenges of significant players such as Chenming, might lead to volatile demand and pricing, impacting Suzano's revenue forecasts.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of R$75.644 for Suzano based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of R$95.0, and the most bearish reporting a price target of just R$64.3.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be R$67.1 billion, earnings will come to R$10.4 billion, and it would be trading on a PE ratio of 18.2x, assuming you use a discount rate of 27.0%.
Given the current share price of R$51.97, the analyst price target of R$75.64 is 31.3% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Trim Suzano Price Target as Board Meetings Drive Valuation Adjustments