Berenberg downgraded Svenska Cellulosa Aktiebolaget (SCA) to “hold” from “buy,” citing expected margin pressure in its wood and pulp operations. The brokerage cut its price target to SEK130 from SEK140, forecasting muted pricing prospects for 2026. Elevated input costs are the primary concern.

The analyst expects costs for SCA’s operating divisions to stay elevated, squeezing profitability despite a recent correction in Nordic wood prices. Berenberg lowered its Q4 2025 EBIT forecast to SEK885 million and trimmed its 2026 estimate by about 3%. Forest division performance should remain strong, but wood and pulp faces contraction.

Looking ahead, NBSK pulp prices are unlikely to rise above SEK7,300 per tonne, pressured by a stronger krona and competition from hard pulp. Kraftliner prices are also under pressure from strong supply and weak demand. The brokerage notes limited near-term upside from U.S. tariff arbitrage on Canadian lumber, which may only boost sales in late 2026.