Deutsche Bank has commenced coverage of Mondi Plc with a "hold" rating and set a target value of 915p for the stock. The company last traded at 958.80p at the close of the previous session.
In the bank's research note, analyst Kevin Fogarty characterises Mondi as a leading, sustainability-focused paper and packaging group operating across more than 30 countries. Fogarty highlights that Mondi's operations are concentrated in Europe, North America and Africa and that the business is structured around a tightly integrated value chain and a product portfolio skewed toward sustainable offerings.
The note also emphasises Mondi's competitive standing on the industry cost curve, but cautions that sectorwide dynamics will present meaningful headwinds. Deutsche Bank identifies three interrelated pressures affecting the packaging and paper industry through 2025: overcapacity, pricing pressure and ongoing cost inflation.
Fogarty wrote that the combination of these forces is expected to deliver a third consecutive year of earnings contraction and to push Mondi's EBITDA margin and return on capital employed to what the bank expects will be more than a 15-year low in fiscal 2025.
Those projections form the basis for the bank's cautious stance and the 915p target. The report outlines that even with Mondi's favourable position on costs and its sustainability-oriented portfolio, prevailing market conditions are likely to erode near-term profitability metrics.
Alongside the coverage initiation, the research note reiterates the geographic footprint and strategic traits that define Mondi's business - a closely linked supply chain, leading market positions in core segments and a focus on sustainable product lines. Nevertheless, the bank's modelling points to further margin compression and lower returns in the near term.
Separately, the note referenced an AI-driven stock screening tool that evaluates companies using a broad set of financial metrics. It noted that the tool assesses fundamentals, momentum and valuation without bias and mentioned past notable picks, including Super Micro Computer (+185%) and AppLovin (+157%), while inviting investors to review whether Mondi appears in the tool's strategies.
Market context - what to watch
- Deutsche Bank's initiation sets a 915p price target and a "hold" rating for Mondi after the stock closed at 958.80p.
- Analyst Kevin Fogarty underscores Mondi's scale, sustainability focus and integrated value chain across Europe, North America and Africa.
- The bank expects industry overcapacity, pricing pressure and cost inflation through 2025 to drive further earnings weakness and compress margins and ROCE to multi-year lows.