UBS has downgraded Metsä Board to a sell rating, slashing its 12-month price target from €2.80 to €2. The brokerage cited a persistent boxboard glut and weakening market conditions as the primary reasons for the move. This reversal comes after UBS had neutralized an earlier sell rating in early 2025.

The folding boxboard segment remains the most oversupplied area in UBS's coverage, and Metsä Board holds significant exposure. UBS lowered its EBIT estimates for 2025 through 2027, citing no clear signs of near-term demand or pricing recovery. The firm expects free cash flow to stay negative for years, with net debt rising sharply.

Metsä Board's shares had rallied about 20% since mid-October, leaving substantial potential downside according to UBS. The stock traded at €3.20 ahead of the report. Investors are now watching for any signs of a market turnaround or further cost-cutting measures from the Finnish paperboard producer.