SUZSuzano S.A.

Suzano S.A. is a leading Brazilian manufacturer specializing in the production and sale of eucalyptus pulp and a diverse range of paper products. The company supplies both the domestic Brazilian market and a vast array of international markets, leveraging its scale as the world's largest producer of eucalyptus pulp. Suzano’s operations span pulp and paper manufacturing, complemented by activities such as paperboard, tissue, lignin byproducts, and value-added forestry management. Its main customers include large multinational consumer goods companies, tissue and hygiene brands, packaging manufacturers, and other industrial buyers who rely on high-quality pulp and paper as raw materials. Additionally, Suzano is actively involved in joint ventures with international corporations, such as Kimberly-Clark, and participates in sectors related to logistics, power generation, and biotechnology.

Eucalyptus pulp, used as a raw material for various paper products and personal hygiene items.,Coated and uncoated printing and writing papers for office, publishing, and education sectors.,Paperboards for packaging applications in food, beverages, and consumer goods.,Tissue papers for hygiene, including household and personal use.,Market and fluff pulp, catering to absorbent product manufacturers.,Lignin and lignin byproducts, applied in adhesives, dispersants, and biochemicals.,Forestry management services, land leasing for reforestation, and biomass-based power generation.

Kimberly-Clark Corporation,International Paper Company,Sylvamo,Clearwater Paper Corporation,Mercer International,Rayonier Advanced Materials,Glatfelter,Pactiv Evergreen,DS Smith

The stock price of Suzano S.A. is driven by global pulp prices, which are sensitive to supply-demand cycles, currency fluctuations—especially the Brazilian real against the US dollar—, and cost management initiatives. Earnings reports and trends, such as rising or falling EBITDA, play an influential role, as do revisions to earnings estimates, which have recently improved. Strategic partnerships (such as with Kimberly-Clark and El Dorado) and M&A activity also serve as catalysts, while macroeconomic factors like tariffs, trade policy, and input cost inflation impact international sales and profitability. Lastly, broader sector trends, including demand for packaging, tissue, and sustainable paper products, contribute to the underlying valuation.

During the most recent quarter, Suzano experienced significant developments including a cost reduction initiative and an increased focus on efficiency. The company entered a strategic partnership with El Dorado aimed at optimizing forestry management and announced a major joint venture with Kimberly-Clark, which will hand Suzano majority control of KMB’s international tissue business. They also had to navigate new 10% US pulp tariffs, which Suzano partially addressed through customer negotiations. While facing market challenges in China and implementing a 3.5% production cut to adapt to demand, the company still managed to grow both sales and EBITDA in Q2 2025. Packaging business improvements and cost optimization are ongoing focuses.

Looking to the next quarter, Suzano is expected to continue its focus on cost control and operational optimization, particularly in response to ongoing price pressures and international trade issues. The closure of the Kimberly-Clark joint venture is anticipated, which should expand Suzano's footprint in the global tissue market by the middle of next year. The firm is also expected to implement further production adjustments and efficiency projects to counter market volatility, especially in Asia and North America. Improvements in the packaging business, along with continued partnerships, are likely, while pulp price recovery could be a key deciding factor for earnings performance. Strategic adaptation to increased US tariffs and gradual stabilization in input costs and currency rates are also predicted.

Suzano commands a globally significant position as the largest eucalyptus pulp producer, benefiting from cost leadership and economies of scale. The company is characterized by strong family ownership, which provides stable governance and a long-term strategic vision. Its diversified product portfolio, spanning pulp, several paper categories, and renewable byproducts, allow for cross-sector revenue streams. The recent partnership with Kimberly-Clark and ongoing efficiency initiatives further enhance its competitiveness and operational flexibility. Suzano’s established supply chain, significant export capability, and proven experience in research and development strengthen its market stature.

Key weaknesses include Suzano’s exposure to cyclical pulp prices, which can quickly erode profitability as shown by recent negative earnings per share (EPS) and net income. The company is also subject to foreign exchange risk, with earnings sensitive to fluctuations in the Brazilian real and other currencies. Tariffs and trade policy shifts, such as recent US import duties, present ongoing challenges for exporting pulp to major markets. Environmental, social, and governance (ESG) pressures are intensifying, which may require additional investment or adaptation. Further, reliance on large international customers and joint ventures can expose Suzano to external decisions beyond its direct control.

Suzano has major growth opportunities through its expanding global partnerships, notably with Kimberly-Clark, which could unlock larger market share in tissue and hygiene paper segments. The push for sustainability in materials and packaging favors pulp producers with environmentally friendly operations, providing a competitive edge for expansion. Potential full acquisition of the KMB international tissue business, future M&A activity, and innovation in lignin byproducts and biochemicals also present attractive prospects. Expanding presence in value-added packaging, adapting to e-commerce growth, and leveraging efficiencies through technology investments further support future upward momentum. Additionally, improvements in operational cost structure and process optimization can drive margin expansion.

Suzano faces significant risks from volatile global pulp prices, which are subject to commodity cycles and changing demand patterns, particularly from China. Currency risks, notably a strengthening Brazilian real, can reduce the company’s export competitiveness and earnings. Increasing tariffs and protectionist trade measures, as seen with the recent US pulp duty, can disrupt key revenue streams and force costly adjustments. Environmental regulations and ESG concerns could lead to additional costs or impose operational restrictions. Competition from established multinationals and potential value traps in cyclical downturns require diligent risk management and timely adaptation by management.

Recent news around Suzano includes a warning about potential US toilet paper shortages due to new tariffs, as Suzano's US shipments have already dropped by 20%. The company announced a $3.4 billion joint venture with Kimberly-Clark, giving Suzano majority control of KMB’s international tissue business, set to close in mid-2026. Suzano has also ended its bid to acquire International Paper after talks broke down, redirecting IP’s focus to its own operational improvements and other acquisitions. Investment firms like Goldman Sachs and Zacks have upgraded Suzano to a strong buy, citing undervaluation, earnings momentum, and currency tailwinds. Additionally, Suzano continues to cut costs, grow sales and EBITDA, and form partnerships like the one with El Dorado to remain competitive in a challenging market.

The broader paper and pulp sector continues to prove resilient, even in the face of digitalization, as e-commerce and packaging demands grow steadily. Sustainability and recycling are becoming increasingly central, shaping consumer preferences and regulatory landscapes. Industry consolidation and strategic partnerships are on the rise as companies seek scale and efficiency to weather price cycles. Exporters are significantly affected by currency movements and global trade policies, which have recently introduced increased volatility. Institutional and hedge fund interest remains strong in the sector, with major players adapting to shifting supply chains, production innovations, and heightened ESG standards.