Bank of America ML downgrades DS Smith, shares slump

DS Smith slumped on Monday after Bank of America Merrill Lynch downgraded its stance on shares of the packaging company to ‘neutral’ from ‘buy’.

The bank said it expects the group to see much lower box volumes in the third quarter and for prices to fall in 2024. It also pointed to higher energy and labour costs.

BofA said it reckons volumes are past their peak and expects them to drop as a result of de-stocking.

It also said that DS Smith’s peers have reported "relatively strong de-stocking effects in container-board/boxes" this earnings season.

The bank said the shares appear "fairly priced" and have outperformed peers by 10%-15% in the last three months.

At 1325 GMT, the shares were down 4% at 339.30p.