Suzano S.A. American Depositary Shares (each representing One Ordinary Share) (SUZ) fair value

ACCE thesis

Suzano makes bleached eucalyptus pulp, the lowest-cost hardwood fiber in the world, along with paper and packaging, and it is one of the largest pulp producers on the planet. Its advantage is structural: eucalyptus plantations in Brazil grow fast enough to make fiber cheaper than most competitors can source it, which keeps operating margins near 27% even when pulp prices are soft. Revenue fell 12.8% over the latest reported period, so the cyclical trough is real, and the market is pricing the stock at 6.9 times trailing earnings and 7.8 times forward earnings. With a 17.6% return on equity and a 26.7% operating margin still intact through the downturn, the question for us is whether pulp prices and Brazilian real exposure are close to a turn, which warrants a deeper look at the cost curve and the pulp price outlook.