Jefferson Smurfit is attracting buy recommendations with brokers urging investors to consider the relatively cheap price of the stock at the moment. NCB Stockbrokers says Jefferson Smurfit together with its US associate, Smurfit Stone, has led a fundamental change in behaviour by corrugated and containerboard producers.

And despite weak demand, unprecedented capacity management has kept US containerboard prices steady this year. NCB doesn't expect any price rises next year and has lowered its earnings per share forecast for the group by 13 per cent to 30 cents.

The current share price discounts a sharp correction in pricing and disregards the statements and actions by sector management. The broker suggests that if the paper industry can reduce past volatility, it can be substantially re-rated. It is setting a share price target of €3, which represents a 42 per cent increase on the current share price, and as such is recommending the shares should be bought.

Davy Stockbrokers is also forecasting a share price target of €3.

Davy states that while this will require some improvement in investment sentiment towards the sector, it believes the alleviation of interest rate concerns in the US together with evidence of sustained industry discipline should generate renewed interest in paper stocks before very long.