Mondi downgraded to 'sell' by Goldman Sachs

Mondi, the paper and packaging group, has been downgraded to 'sell' by Goldman Sachs after a strong run in the shares and "stretched" growth expectations.

Goldman said it saw 12% downside to shares in the FTSE 100 group, which was spun-off from miner Anglo American in July 2007, after a 41% price rise since the start of the 2015.

The US bank said it believed growth expectations were stretched, given Mondi's high exposure to kraftliner packaging and near-50% sales exposure to emerging markets.

On publication, Mondi trades at 8.9 times 2016 expected EV/EBITDA on 3% expected EBITDA growth in 2016, versus Goldman's packaging average of 12% and 7.4 times expected EV/EBITDA.

A new target price of 1,300p was set, down from the previous 1,380p.

Last month Mondi reported first half profits up 30% to €490m, following a boost in sales, with the London- and Johannesburg-listed company enjoying said like for like sales volumes were up across almost all European and international markets.