Does Huhtamäki Offer Value After Its 46% Discount and Recent Sustainability Focus in 2025?

Thinking about whether to hold onto Huhtamäki Oyj stock or finally take the plunge? You are not alone. With shares closing at 30.08, some investors might hesitate after a year marked by a -9.8% loss and a longer five-year drop of -13.2%. Even so, these numbers do not tell the whole story. There have been recent bright spots, with the stock up 0.3% over the last week, pointing to changing sentiment. While the year-to-date return is still a tough -13.1%, many in the market are watching for signs the slide could be ending.

Some of this interest comes after fresh market developments that may signal a shift in how investors see the packaging sector's resilience, especially as sustainability and innovative materials become hotter topics in global markets. These factors have elevated risk perceptions in the short term, but that could also mean opportunity for those willing to look beyond recent volatility.

That is where valuation gets interesting. On a scorecard of six key checks for finding undervalued companies, Huhtamäki Oyj comes in strong by passing every single one for a perfect value score of 6 out of 6. Does that mean it is a screaming buy? Not so fast. There are several ways to value a business, and in the next section, we will dive into these popular approaches. Stick around, though, as the best way to size up a stock like this might surprise you.

Huhtamäki Oyj delivered -9.8% returns over the last year. See how this stacks up to the rest of the Packaging industry.

Approach 1: Huhtamäki Oyj Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s value by projecting its expected future cash flows and discounting them back to today’s value. This approach focuses on how much cash the business can generate over time and what those future euros are worth in the present.

For Huhtamäki Oyj, the latest reported Free Cash Flow stands at €148.4 million. Analysts provide estimates for up to five years, expecting growth to around €267 million by 2029. After that, future figures are extrapolated using standard growth assumptions. This projected steady increase highlights expectations for the business’s long-term ability to generate cash.

Taking all these projected cash flows together, the model calculates an estimated intrinsic value per share of €55.79. With shares currently trading at €30.08, the DCF model indicates Huhtamäki Oyj is trading at a 46.1% discount to its calculated fair value. This suggests the stock is currently undervalued based on this measure.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Huhtamäki Oyj.

Our Discounted Cash Flow (DCF) analysis suggests Huhtamäki Oyj is undervalued by 46.1%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Huhtamäki Oyj Price vs Earnings

The Price-to-Earnings (PE) ratio is a go-to measure for valuing profitable companies like Huhtamäki Oyj. It allows investors to gauge what the market is paying for each euro of current earnings. Generally, faster-growing and less risky businesses will command higher PE ratios, while slower-growing or riskier firms trade at lower multiples. What is considered “normal” depends on both the company’s future prospects and the overall market mood around the sector.

Huhtamäki Oyj’s current PE ratio is 15.7x. For context, the average PE ratio across the packaging industry is 16.1x, and Huhtamäki’s peers trade at an even higher average of 19.1x. These benchmarks suggest that, on the surface, Huhtamäki is trading a little below the industry norm.

However, instead of just relying on industry or peer comparisons, Simply Wall St uses a proprietary “Fair Ratio” that weighs important factors including earnings growth outlook, profit margins, risk profile, size, and the characteristics of the packaging sector. For Huhtamäki Oyj, the Fair Ratio is estimated at 22.8x. This reflects expectations for healthy earnings growth combined with the company’s risk and financial profile. Because this figure takes into account more nuanced factors than peer or industry averages, it offers a better sense of true value specific to Huhtamäki.

Comparing the Fair Ratio of 22.8x to the current PE ratio of 15.7x, the stock appears to be undervalued based on this in-depth approach.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Huhtamäki Oyj Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives. Simply put, a Narrative is your personal story or viewpoint about a company, where you describe what you think will happen to Huhtamäki Oyj’s business, such as your own fair value estimate and expectations for future revenue, profit margins, and earnings growth.

Unlike static models, a Narrative connects your perspective to a clear financial forecast and a calculated fair value, giving you a "why" behind each number. Narratives are easy and accessible, available right within the Community page on the Simply Wall St platform, where millions of investors refine, compare, and update their ideas in real time.

With Narratives, you can continually reassess whether to buy, hold, or sell by comparing your fair value estimate against today’s market price. Because Narratives update dynamically with each new earnings release or news update, your decision-making can always reflect the latest information. For example, one Narrative might see Huhtamäki Oyj as offering 30% upside if margins rebound and the PE multiple rises, while another sees only moderate growth and suggests fair value is close to today’s price.

Your Narrative becomes the smartest way to link what you believe about Huhtamäki’s future to actionable investment decisions, bringing the numbers to life.

Do you think there's more to the story for Huhtamäki Oyj? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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