Smurfit WestRock PLC "Risks on 2Q26, but 2027 consensus upside" (Buy) Jones

Research evidence excerpt

Smurfit WestRock PLC "Risks on 2Q26, but 2027 consensus upside" (Buy) Jones

t from weaker

12/26E

volumes (N.America), $8m tailwind from FX, -$13m from higher labour costs, +$30m From To % ch Cons.

from lower planned downtime & +$70m benefit from lower OCC prices. Overall, we Q1 0.49 0.12 -75 -

forecast Group Adj. EBITDA for 2Q26 at $1,152m (+7% q/q, -5%y/y), -0.5% vs. VA Q2E 0.47 0.40 -14 -

cons, but would not be surprised if cost pressure resulted in EBITDA closer to $1.1bn Q3E 0.76 0.71 -7 -

before higher pricing lifts margins into 2H. Q4E 0.51 0.67 32 -

12/26E 2.22 1.91 -14 -

Higher 2026 exit rate suggests upside to 2027 cons 12/27E 2.84 3.31 16 -

Persistent cost pressure post Iran will negatively impact SW's costs relative to our initial 12/28E 3.45 3.63 5 -

forecast at the start of 2026 and unlike price increases, costs hit the income statement Andrew Jones

quickly, suggesting some risk to 2/3Q earnings before the impact of recent price Analyst

increases comes through. For this reason, we cut our 2026 EBITDA estimate 3% to the andrew-i.jones@ubs.com

lower end of the $5-5.3bn) guidance range. However, if Smurfit hit 2026 guidance, +44-20-7901 6545

4Q26 EBITDA needs to annualise ~$5.8bn vs 2027 cons of $5.66bn. While we expect Anojja Shah

some downside in EU prices as the market absorbs 1.2mt of new capacity from IP & Eren Analyst

Paper, we would expect some of the 2026 cost pressure to reverse and volume growth anojja.shah@ubs.com

to return, so we see consensus for 2027 lifting from here. We increase our 2027/28E +1-312-525 4310

EBITDA estimates 6/2% to $5.9/6.1bn. Another US price hike is not our base case, but

with utilisations ~94%+, we would not rule it out, which could lift 2027 EBITDA >$6bn.

Valuation: Buy (and top pick) at an unchanged PT of $56/sh