LatAm Pulp Model Update

Research evidence excerpt

LatAm Pulp Model Update

J P M O R G A N Latin America Equity Research

11 June 2026

LatAm Pulp

Model Update

We are updating our models to incorporate 1Q26 results and the latest macro and LatAm Basic Materials

ACcommodities estimates. Within our macro estimate changes, our economics team Rodolfo Angele, CFA

has updated the BRL FX for 2026 from 5.28 to 5.19 and for 2027 from 5.38 to 5.19. (55-11) 4950-3888

This change has impacted our Brazilian companies, driving our price target rodolfo.r.angele@jpmorgan.com

reductions for both Suzano and Klabin. (a) Suzano: while we reduce our price Tathiane Martins Candini

target due to FX changes from R$74.0/sh to R$68.0/sh, the company continues to (55-11) 4950-4116

benefit from its hedging strategy. Suzano remains our top pick in the sector, with tathiane.m.candini@jpmorgan.com

Banco J.P. Morgan S.A.

the company trading at 5.3x EV/EBITDA in 2026 and 4.4x in 2027, with a FCF

generation of ~18% (excluding KC) in 2027. (b) Klabin: we are updating our price

target from R$22.0/sh to R$20.0/sh. The company estimates that every 10 cents of

FX change translates into R$160M of lower EBITDA, which has driven our

EBITDA for 2026 from R$7.9B to R$7.7B. We expect both pulp and paper units

to deliver a stronger performance in the 2Q, while we continue to see macro

pressures limiting material improvements. On the Chiliean companies, we

continue to rate both as Neutral. (c) CMPC: pulp prices should peak in the 2Q, with

demand pressuing prices for the 2H. In the softys and packaging units, we continue

to expect limited margin expansion due to the lack of positive triggers for the

sectors. (d) COPEC: movements on pulp should be similar to the other companies,

with softwood prices improving in coming quarters with better spreads against

hardwood.