UPM EUR424m 3Q21 EBIT was 9% cons beat, principally due to (cycle peak) pulp prices. While higher energy prices boosted UPM Energy, Communication Paper was loss-making. Modelling 15% European pulp correction, we forecast EUR1.2bn UPM FY22e Comparable EBIT (8% below cons). As confidence builds in: 1) Global pulp stabilisation, 2) Communication Paper return to profit and 3) ''Spearheads for Growth'' delivery: expect UPM re-rating. Outperform with EUR37 TP. Record EUR424m 3Q21 EBIT: a 9% consensus EBIT beat 3Q21 EUR424m Comparable EBIT was 9% cons beat, due to (cycle peak) Biorefining pulp prices and Energy (higher electricity prices), offsetting Communication Paper loss (higher energy costs). Modelling a 15% pulp correction gives EUR1.2bn UPM FY22e EBIT: 8% below consensus UPM is ''net long'' 1mT pulp: each 10% pulp price = EUR56m EBIT (5% EPS). Modelling 15% European pulp correction: forecast EUR1.2bn FY22e Comparable EBIT, sitting 8% below street. Communication Paper EUR30m 3Q21 EBIT loss: additional paper price hikes targeted UPM Communication Paper was loss-making in 3Q21, due to increased energy costs. UPM (and industry peers) target additional paper price hikes to return this division to consistent profitability. UPM Spearheads remain on track and on-budget to double UPM EBIT by FY24e UPM organic expansion ''Spearheads for Growth'' projects (Uruguay Pulp mill and German Bio-chemicals plant) remain on-track to double UPM Comparable EBIT from EUR0.95m in FY20 to EUR2.0bn in FY24e (giving 22% UPM FY20-24 EPS CAGR). Confident of ''Spearheads for Growth'' delivery: Reaffirm outperform with EUR37TP As confidence builds in: 1) Global pulp demand/pricing stabilisation, 2) Communication Paper return to profit, 3) UPM ''Spearheads for Growth'' delivery, with 4) Continued appealing dividends: expect UPM re-rating. Reaffirm Outperform with EUR37 TP.