WRK - Suzano: Perennial Competitive Advantages And Attractive Valuation

2024-05-19 00:02:17 ET

Summary

• Suzano is the world's largest producer of eucalyptus short fiber pulp, with competitive advantages in Brazil.
• The company has strong growth, a high EBITDA margin, and a very attractive return on equity.
• Despite this, the company trades at an EV/EBITDA multiple with a discount of 9.8% to the peer average, which makes no sense.

Investment Thesis

I recommend buying Suzano ( SUZ ) shares. The company is the world's largest producer of eucalyptus short fiber pulp and has great competitive advantages for operating in Brazil, whose climate, soil and trees offer faster planting and a consequently more competitive cost....

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