Goldman Sachs has cut its investment rating on paper and packaging group Mondi (LON:MNDI) to 'sell' from 'neutral', stating that the factors driving stock outperformance compared to peers are weakening.
The City heavyweight added: "Mondi is the strongest performer ytd in our coverage and now trades on a 3% EV/EBITDA premium vs. Stoxx 600 compared to a 10% historical discount.
"Given our expectations for lackluster 2017/18 growth and downward pressure on consensus, we believe this premium is unjustified and downgrade Mondi to Sell."
Nevertheless, analysts have raised their target price to 1,400 pence per share (from 1,325 pence), implying around 10 per cent potential downside.
At 1:19pm: (LON:MNDI) Mondi PLC share price was -2.5p at 1537.5p