Mondi is an international paper and packaging group with production operations in over 30 countries. The group's key operations are in central Europe and South Africa.
Mondi tends to be resilient to economic cyclicality through its focus on corrugated boxes, which are primarily used in defensive sectors such as food and beverages. The company remains our preferred counter in the sector and is regarded as a core portfolio holding.
The share price is currently hovering around a key support level, which makes it an attractive investment opportunity (see the black support trendline). At this level, buying pressure is expected to overcome selling pressure, which could cause the price to rise. However, if the price breaks through support, this could indicate that selling pressure has become stronger.
We expect the current support level will hold and the price will continue to rise from its current levels.
We suggest a medium capital at risk allocation to this trade. Increase exposure for a break above R288.00
Share Information
| Share code | MNP |
|---|---|
| Industry | Paper & Forestry |
| Market capatalisation (ZAR) | 138.15 billion |
| One year total return | 4.64% |
| Return year-to-date | 1.19% |
| Current price(ZAR) | 284.88 |
| 52 weeek high(ZAR) | 339.69 |
| 52 week low(ZAR) | 262.45 |
| Financial year end | December |
| Closing paragraph | The share remains below its 200-day simple moving average, but is approaching it. Trade above this level could set a long-term bullish trend. |
Consensus Expectations (Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (EUR) | 1.96 | 1.30 | 1.41 | 1.47 |
| Growth (%) | -33.62 | 8.61 | 4.32 | |
| Dividend Per Share (EUR) | 0.70 | 0.69 | 0.71 | 0.73 |
| Growth (%) | -2.14 | 3.65 | 2.25 | |
| Forward PE (times) | 11.29 | 10.40 | 9.97 | |
| Forward Dividend Yield (%) | 4.66 | 4.83 | 4.94 | |
| Closing paragraph | While growth is expected to show a pull-back in the short term, from a robust base, this is expected to normalise over the forecast horizon (we see upside risk to estimates). | |||
Buy or Sell Rationale
Technical Analysis :
Long term fundamental view:
| Share Name and position | TFG - BUY (Continue to hold) | BAW - BUY (Continue to hold) | OMU - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 83.54 | 85.56 | 11.67 |
| Current | 90.95 | 89.31 | 11.80 |
| Movement | 8.9% | 4.4% | 1.1% |
| Summary text |
The price remains in an oversold scenario with a steep bearish trend. Still trading below its 200-day simple moving average, but fading downside price momentum supports a bullish stance.
Our take profit target is set at R132.00, with a trailing stop-loss at R72.50. Time exit: 8 July 2024. |
Remains close to a key Fibonacci retracement level and testing its 200-day simple moving average. Fading downside price momentum is supportive.
Our take profit target remains at R104.00, with a trailing stop-loss at R81.65. Time exit: 3 July 2023. |
The price is counter-testing a bearish trend and remains above its 200-day simple moving average. Upside price momentum has regained some strength.
Take profit target is R16.00, with a stop-loss at R10.00. Time exit: 17 November 2023. |
| Share Name and position | LHC - BUY (Continue to hold) | VOD - BUY (Continue to hold) | MTN - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 19.30 | 126.50 | 132.49 |
| Current | 19.29 | 122.04 | 127.47 |
| Movement | -0.1% | -3.5% | -3.8% |
| Summary text |
The price is still near a major support level and is trading above its 200-day simple moving average. Fading downside momentum is supportive.
Take profit target set at R22.20, with a trailing stop-loss at R18.05. Time exit: 26 June 2023. |
The price is hovering near a significant support level but dipped below its 200-day simple moving average. Fading upside momentum is a concern.
Take profit target set at R144.00, with a trailing stop-loss at R120.00. Time exit: 1 May 2023. |
The price is starting wave 3 of a 5-wave analysis. Remains below its 200-day simple moving average. Downside momentum is a concern.
Take profit target set at R190.00, with a trailing stop-loss at R113.00. Time exit: 6 November 2023. |
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