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Is Holmen (OM:HOLM B) Fairly Valued After Its FTSE All World Index Exit?

Simply Wall St · 2d ago

Holmen (OM:HOLM B) has drawn fresh attention after being removed from the FTSE All-World Index. This change can prompt index-tracking funds to rebalance and adjust positions in the Swedish forestry group.

Recent trading suggests a mixed picture for Holmen. The share price has edged higher over the past quarter, with a 90 day share price return of 5.99%. However, the year to date share price return is down 7.11%, and the 1 year total shareholder return has slipped 5.80%.

Scan how Holmen compares with other forest and materials players reacting to index changes by reviewing the hand picked list of solid balance sheet and fundamentals (198 results) in this space.

Holmen has bounced in recent weeks yet remains down over the year and has just been dropped from a major global index. Is the current valuation still offering upside, or has most of the opportunity already been priced in?

Most Popular Narrative: 4.7% Undervalued

On the current numbers, Holmen is trading below the most followed fair value estimate of SEK345.56, with the last close at SEK329.20, so the gap between price and narrative value remains modest but visible.

The ongoing global shift towards renewable materials and sustainable packaging is likely to drive strong top-line growth for Holmen's paperboard and forest divisions once the economic cycle and consumer confidence rebound, positively impacting long-term revenues.

See why 4 investors see Holmen as 5% undervalued.

Result: Fair Value of SEK345.56 (UNDERVALUED)

Still, the narrative around Holmen can quickly change if weak demand in key export markets lingers or if higher wood and energy costs continue to squeeze profitability.

Find out about the key risks to this Holmen narrative.

Next Steps

Mixed messages like this often split opinion. Act quickly, review the underlying data for yourself, and then weigh up the 2 key rewards and 2 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.