Smurfit Kappa shares fall following downgrade
Shares in Irish packaging firm Smurfit Kappa fell by 2.5pc on the ISEQ index yesterday after the company's stock was downgraded by US investment bank Jeffries.
Jeffries believes that a rise in the cost of production of old corrugated containers (OCCS) will hit company's earnings. The note from Jeffries downgraded Smurfit Kappa stocks from "buy" to "hold", noting that the company faces a "headwind" of €80m due to an increase in the cost of raw materials.
The investors' note, written by Jeffries analyst Justin Jordan, said: "Industry sources suggest Smurfit Kappa has been unsuccessful in targeted €40 a tonne (8pc) recycled containerboard increase to offset higher OCC."
The latest analysis of the firm's stock forecast a decline of 3pc in 2017, bringing the company's overall revenue to €1.2bn. Smurfit Kappa shares were trading at €19.90 yesterday afternoon.