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Mercer International (NASDAQ:MERC) +10.9% in Wednesday’s trading after Credit Suisse upgraded shares to Outperform from Neutral with a $19 price target, citing “pulp positives aplenty” after shares slid 7% yesterday following a fire at the company’s Stendal pulp mill.
Despite some near-term concerns around the impact of the fire and fears of a recession, Credit Suisse’s Andrew Kuske sees many positives working for the company, including commodity prices, favorable foreign exchange rates and an attractive valuation.
Kuske believes Mercer’s (MERC) power business is likely to be “very additive,” while various new business opportunities such as mass timber are “clearly interesting, albeit rather small at this stage.”
Mercer International’s (MERC) Q1 adjusted earnings were $1.35/share on revenues of $592M.