We initiate coverage of NSKOG with a BUY rating and NOK 40 target price. We model Norske Skog to generate strong cash flows from its European mills despite a very challenging market outlook. The Company is also planning a move into recycled containerboard, lifting EBITDA by ~NOK 650m and improving its ESG screening further, but we still emphasize funding risk. Our target price is based on a SOTP, implying a 5.9x/4.2x EV/EBITDA on our 21/22 estimates.
