Goldman Sachs has upgraded paper & packaging giant Mondi PLC (LON:MNDI), emulating Deutsche Bank's move yesterday.
Like Deutsche Bank (DB), Goldman Sachs has moved from a neutral position to a 'buy' recommendation.
READ Mondi way too cheap, especially with the likelihood of a huge special dividend
The target price of 2,200p is about 18% above the current share price level and is 50p higher than DB's valuation.
“Since the 3Q earnings release on October 11, the stock is down 11%, under-performing our coverage by 21% and offering an attractive entry opportunity,” Goldman Sachs said.
“Mondi remains the highest-return company in our coverage; recent container-board price increases are a tailwind for 2018 earnings, as are annual contracts resetting at higher levels. In addition, we expect ongoing capex projects to underpin growth from 2019,” the investment bank added.
The projected yield for 2017, while not eye-popping at 3%, makes the stock worth a look and Goldman believes the dividend could be more than doubled through a potential special dividend announcement at the time of the full-year results.