Panmure Liberum has begun coverage of Mondi PLC (LSE:MNDI), the packaging and paper group, with a 'buy' recommendation and a target price of 1,103p.
Mondi's market capitalisation stood at £3.873 billion at the time of the note's publication.
Panmure Liberum said the market underestimates Mondi's flexible packaging business, which accounted for 56% of earnings before interest, tax, depreciation and amortisation (EBITDA) in the 2025 financial year.
The broker said Mondi holds a global leadership position in flexible packaging, a market it described as more attractive through the economic cycle than commodity paper products.
Analysts highlighted the company's capital intensity, noting it has invested €4,235 million over five years, with €1.2 billion committed over the past three years alone.
Panmure Liberum said this investment has diluted recent returns, but argued that Mondi's focus on cost-advantaged assets means a recovery in volumes and prices could prove powerful for earnings.
The broker's analysis suggested that if margins reach peak levels by the 2028 financial year, earnings per share could rise by 235% from current estimates.
Panmure Liberum's target price was derived using a blended valuation approach, combining separate valuations for Mondi's corrugated packaging and flexible packaging divisions.
The broker forecasts Mondi’s EBITDA will fall to €827.3 million in 2026, from €1.001 billion in 2025, before recovering to €973.1 million in 2027 and €1.033 billion in 2028.
