Overview
Itau BBA reaffirmed an Outperform recommendation and a R$58.00 target on Suzano Papel & Celulose following the release of the company’s fourth-quarter 2025 financials. The quarter was highlighted by a better-than-anticipated EBITDA and sales performance, driven principally by the pulp division.
Quarterly results in brief
Suzano reported EBITDA of BRL 5.6 billion for Q4 2025, a 7% increase versus the prior quarter. That EBITDA figure outpaced analyst estimates by 13% and was 10% above consensus. Revenue performance contributed to the upside, with InvestingPro data cited showing 17.4% revenue growth over the last twelve months and an aggregate EBITDA figure of $4.16 billion for the trailing period.
Pulp segment - the driver
The company’s pulp business was the principal contributor to the quarter’s outperformance. Net revenue in the pulp segment reached BRL 9.9 billion, a 9% rise from the prior quarter. Shipments climbed 8% to 3.4 million tons, while average realized pulp prices increased by USD 12 per ton to USD 537 per ton. At the same time, pulp cash cost per ton fell by 3% to BRL 778, attributed to lower raw material costs. These factors supported a consolidated gross profit margin of 34.4% for the period.
Paper segment - steady improvement
Suzano’s paper division also showed sequential gains. Net revenue for paper rose 5% quarter-over-quarter to BRL 3.2 billion, aided by a 9% increase in sales volume to 474,000 tons. Paper EBITDA was BRL 785 million, up 6% versus the prior quarter and 4% year-over-year, reflecting continued operational stability within the Paper & Forest Products segment.
Cash generation and balance sheet dynamics
Operating free cash flow was strong at BRL 3.4 billion, representing a 21% annualized yield. Robust cash flow helped reduce Suzano’s financial leverage to 3.2x. Complementary InvestingPro metrics cited in the results indicate an 11% free cash flow yield and a current ratio of 3.2. Management also announced a share repurchase program for 40 million shares, equivalent to 6.5% of the company’s free float.
Valuation and consensus expectations
The stock is trading at a reported price-to-earnings ratio of 10.3. InvestingPro Tips referenced in the release indicate net income is expected to grow this year. These valuation and earnings expectations are part of the backdrop for Itau BBA’s maintained Outperform rating and price target.
Earnings per share surprise and revenue beat
The Q4 results were mixed on earnings per share metrics. Reported EPS was $0.0192, falling short of the expected $0.0411, a negative surprise of 53.28%. By contrast, revenue came in above forecasts at $2.52 billion versus a $2.24 billion estimate, a positive surprise of 12.5%. The divergence between top-line strength and EPS underperformance was highlighted in the company’s reported disclosures.
What this means
The quarter presented a complex financial picture: robust operational performance and cash generation, particularly in pulp, alongside an EPS miss. The continued buyback program and reduced leverage point to a stronger cash position, while the EPS shortfall underscores that profits per share did not keep pace with sales gains in the period. Market participants and analysts have taken these mixed signals into account in maintaining recommendations and targets.
Data and metrics cited
- Q4 2025 EBITDA: BRL 5.6 billion (up 7% q/q)
- Pulp net revenue: BRL 9.9 billion (up 9% q/q)
- Pulp shipments: 3.4 million tons (up 8% q/q)
- Average realized pulp price: USD 537/ton (up USD 12/ton)
- Pulp cash cost: BRL 778/ton (down 3%)
- Paper net revenue: BRL 3.2 billion (up 5% q/q)
- Paper sales volume: 474,000 tons (up 9% q/q)
- Paper EBITDA: BRL 785 million (up 6% q/q; up 4% y/y)
- Operating free cash flow: BRL 3.4 billion (21% annualized yield)
- Financial leverage: 3.2x
- Share buyback: 40 million shares (6.5% of float)
- Reported EPS: $0.0192 vs expected $0.0411 (negative surprise of 53.28%)
- Reported revenue: $2.52 billion vs expected $2.24 billion (positive surprise of 12.5%)
Note: The figures and analyst actions described are drawn from the company’s reported fourth-quarter 2025 disclosures and referenced InvestingPro metrics as presented in the results materials.