EMEA Paper & Packaging: Pulp Q2‘26 previews: Costs to weigh on earnings, long-term concerns on pulp prices remain

Research evidence excerpt

EMEA Paper & Packaging: Pulp Q2‘26 previews: Costs to weigh on earnings, long-term concerns on pulp prices remain

J P M O R G A N Europe Equity Research

15 July 2026

EMEA Paper & Packaging

Pulp Q2’26 previews: Costs to weigh on earnings, long-

term concerns on pulp prices remain

Ahead of this quarter’s earnings, we have updated our estimates to reflect the latest EMEA Forestry, Paper & Packaging

pricing, cost trends and FX. Since the start of the Middle East conflict, UPM, Stora and South African Industrials

Enso, SCA and Sappi shares are down ~12%, ~17%, ~17% and ~38%, Detlef Winckelmann AC

respectively, on higher input costs (mainly energy, fuel, OCC and freight) and (44-20) 3493-5190

concerns over demand. While most products have seen prices move higher, on detlef.winckelmann@jpmorgan.com

balance, we see the majority as insufficient to offset cost inflation. Accordingly, we J.P.LimitedMorgan Securities plc / J.P. Morgan Markets

expect price/cost to be negative in Q2’26, especially since some prices only Madhumita Phadke

increase with a lag. In our view, this has not been correctly reflected in consensus (91-22) 6157-3935

for UPM (JPMe: 21% below EBIT consensus) and SCA (JPMe: 13% below madhumita.phadke@jpmchase.com

EBITDA consensus) but note that we don’t view consensus as representative of J.P. Morgan India Private Limited

buy side expectations. For example, we flagged last month (here) that we were 20%

below Bloomberg EBITDA consensus for SCA, and investor feedback suggested

that they were in line with our own estimate. In the case of UPM, we have removed

Plywood EBIT from our EBIT estimate as it will be reported as discontinued and,

based on the moves in consensus estimates over the last few months, it looks as if