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Citi upgrades Billerud on cancellation of Escanaba mill conversion

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** Citigroup raises Billerud BILL.ST to "neutral" from "sell", saying the recent cancellation of Escanaba mill conversion improves its medium-term outlook for cashflows, utilisation rates and margins

** It expects the Swedish pulp maker's free cash flow to increase from SEK 2 bln ($190 mln) to SEK 11 bln over 2024-2030

** It also sees long-term value and earnings growth, as major capex projects are delivered in a growing market

** But it notes Billerud's low wood self-sufficiency vs peers - Holmen HOLMb.ST, Stora Enso STERV.HE and UPM UMP.HE - makes it more exposed to rising wood costs

** "The downside risk is greatly reduced without the US project but we don't see clear upside besides market pricing recovery," Citi says

** Out of eight analysts covering Billerud, four rate the stock "strong buy" and four "hold"

($1 = 10.5432 Swedish crowns)

Reporting by Anna Chaberska


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