Jefferies Assumes Smurfit Westrock (SW) at Hold

Jefferies analyst Philip Ng assumes coverage on Smurfit Westrock (NYSE: SW) with a Hold rating and a price target of $52.00.

The analyst comments: "With WRK never properly integrating past transactions, operating with the high-cost mills & under-capitalized assets, and pivoting the focus to the local level & box business, given SKG's track record of deploying capital & fixing bad businesses, we see upside over the LT. That said, with multiple ERP / SAP systems to harmonize, mill closures likely on the horizon, and a significant cultural shift, we expect the integration of WRK to be choppy the next 12 months. WRK's historical capex avg of ~$1 bil is expected to step up to $1.5-1.8 bil for the next few years & restructuring cash costs will be elevated, but partially offset by SKG's capital projects winding down. We're waiting for better clarity on how to think about the earnings power of the combined businesses, and expect it'll take time to flush out the noise from harmonizing the financials & new segments. We're taking a wait & see approach & assuming coverage of the new combined SKG / WRK entity, SW, as a Hold, and $52 PT based on 7.0x 2025E EV/EBITDA."

For an analyst ratings summary and ratings history on Smurfit Westrock click here. For more ratings news on Smurfit Westrock click here.

Shares of Smurfit Westrock closed at $48.81 yesterday.

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