Berenberg sees 'difficulties ahead' for DS Smith

Berenberg pointed out that since sharp falls in the final quarter of 2018, DS Smith shares had been "largely rangebound between 320.0p and 380.0p "as the market continued to fret about volume growth, paper prices and margins."

The German bank, which reiterated its 'buy' rating on DS Smith, noted that consensus numbers had steadily moved down, reflecting the market concerns and headwinds coming in the form of macro drivers.

Taking into account the latest threats to global economic growth, most notably the outbreak of the Wuhan coronavirus, as well as currency fluctuations, Berenberg said it was forced to lower its assumptions for DS Smith by 5-10% and cut its price target.

"In the near term, DS Smith will have to navigate the current headwinds. Thereafter, though, we think the positives will start to show through," said Berenberg.

"Despite all this, we still believe the shares are cheap on an absolute basis and relative to peers, and we think the medium-term fundamentals are attractive."