Broker snap: Mondi remains top pick in sector

6th May 2011 12:33

RBS has hiked its target price for Mondi, saying that the paper and packaging firm remains its top pick across the pan-European paper sector.In the first quarter, Mondi delivered a record operating profit of €187m, "with price increases and volume growth from its emerging Europe-based operations more than offsetting input cost pressures and concerns regards US$/€ exchange rates," the broker said.RBS upgrades 2011 pre-tax profit and earnings per share estimates by 8%, and 2012 forecasts by 4%."2011 is the first full year for Mondi to benefit from optimising its newly expanded low-cost pulp and paper manufacturing capacity in emerging Europe, with its structurally superior demand growth for paper."A 'buy' is maintained, while the target price is upped to 725p, from 675p.---BC