SKN | Citigroup Maintains Neutral on Svenska Cellulosa Aktiebolaget (SCABY), Trims February 2026 Price Target

Takeaways

• Citigroup kept its Neutral rating on SCA while cutting the price target, signaling valuation fine-tuning rather than a change in conviction.

• The target reduction reflects near-term margin and cost pressures, not a deterioration in long-term fundamentals.

• Performance expectations remain broadly in line with peers, keeping SCABY in a wait-and-see zone for investors.

Citigroup Adjusts Price Target Without Changing Stance

Citigroup reaffirmed its Neutral rating on Svenska Cellulosa Aktiebolaget SCA on February 4, 2026, while lowering its price target to SEK 120 from SEK 128. The decision reflects a modest downward revision to near-term assumptions rather than a shift toward a bearish outlook. In analyst terms, this kind of move is typically associated with updated cost, demand, or pricing inputs rather than a reassessment of strategic direction.

What the New Target Implies for Valuation

By trimming the target, Citigroup is effectively narrowing the expected upside from current levels. The revised SEK 120 valuation suggests slightly softer expectations for margins or growth in the coming quarters, likely tied to pulp pricing, input costs, or currency effects. Importantly, the absence of a rating change indicates that Citi still sees SCA’s risk-reward profile as balanced rather than skewed decisively in either direction.

Interpreting the Neutral Rating

A Neutral rating signals that Citigroup expects SCA shares to perform broadly in line with sector peers and relevant indices. For investors, this is neither a buy signal nor a sell warning. Instead, it suggests that clearer catalysts—such as a sustained recovery in pulp demand, stronger pricing, or demonstrable cost relief—would be needed to justify a more constructive stance.

Broader Analyst Context

SCA’s analyst coverage has historically been sensitive to commodity cycles, particularly pulp prices and forestry market dynamics. Periodic price-target trims without rating changes are common in this space, reflecting incremental shifts in market assumptions rather than abrupt changes in company outlook. Citi’s latest update fits this established pattern.

Market Reaction and Near-Term Focus

Because the recommendation itself was unchanged, the market response to Citi’s note was muted. Investors are likely to remain focused on external drivers such as pulp pricing trends, energy and logistics costs, and currency movements, which tend to have a more immediate impact on sentiment than marginal valuation tweaks.

Bottom Line

Citigroup’s February 2026 update on Svenska Cellulosa Aktiebolaget SCA should be read as a calibration, not a warning. The maintained Neutral rating underscores expectations for peer-like performance, while the lower price target highlights ongoing sensitivity to near-term cost and market conditions. For now, SCABY remains a monitoring position rather than a high-conviction opportunity, with commodity cycles continuing to play a central role in shaping its short-term outlook.

For a confidential discussion on how commodity cycles, pulp pricing trends, and margin resilience may influence SCA’s valuation outlook within a diversified portfolio strategy, contact our senior advisory team.