Shares of Smurfit Westrock (NYSE:SW) fell 4.5% on Monday, while International Paper (NYSE:IP) dropped 3.8%, after rival Mondi issued a profit warning, saying that tough market conditions are expected to persist through the end of the year and that its quarterly earnings came in below forecasts.
Mondi’s shares plunged as much as 16%, marking their sharpest decline in nearly 17 years, after the company reported preliminary third-quarter underlying EBITDA of €223 million, down from €274 million in the previous quarter. The group blamed the shortfall on “fragile demand-side confidence” and “oversupplied markets,” which have weighed on prices and profitability.
The warning from Mondi sparked a sector-wide selloff, dragging down other major paper and packaging producers. European peers Billerud, Stora Enso, and UPM-Kymmene also saw their shares decline by 1.5%, 5%, and 2.5%, respectively.
Analysts said the update will likely lead to broad earnings downgrades across the industry. Jefferies analyst Cole Hathorn commented that Mondi’s warning suggests fiscal 2025 EBITDA estimates could be reduced by 9%–13%, while Morgan Stanley’s Brian Morgan expects a more than 10% cut to 2025 earnings forecasts.
Mondi added that it has extended certain planned maintenance shutdowns in an effort to limit the impact of weak demand, and noted that current selling prices remain below third-quarter averages, highlighting continued pricing pressure across the sector.
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