Suzano S.A.'s Inclusion in the Brazil Valor BM&FBOVESPA Index and Its Implications for Long-Term Investors

For long-term investors seeking exposure to Brazil’s sustainable forestry and pulp sector, Suzano S.A. (SUZB3.SA) presents a compelling case. The company’s inclusion in the Brazil Valor BM&FBOVESPA Index (Ibovespa) in January 2020 acted as a catalyst, amplifying its liquidity, institutional interest, and valuation re-rating. Coupled with its recent EBITDA outperformance and leadership in sustainable pulp production, Suzano’s trajectory underscores its potential as a strategic holding.

Strategic Index Inclusion: A Catalyst for Liquidity and Visibility

Suzano’s inclusion in the Ibovespa—a benchmark for Brazil’s equity market—was not accidental. To qualify, the company met stringent criteria: it ranked in the top 85% by tradability ratio, maintained trading activity in 95% of sessions, and avoided penny-stock classification [1]. This inclusion, coupled with the index’s quarterly rebalancing, ensured Suzano’s sustained visibility among institutional investors. The move likely boosted liquidity, as evidenced by a 6.31% share price surge following its joint venture with Kimberly-Clark in 2025, which expanded its global footprint [2].

EBITDA Outperformance and Operational Excellence

Suzano’s financials post-2020 tell a story of resilience. In Q2 2025, the company reported adjusted EBITDA of R$6.1 billion, driven by the new Ribas do Rio Pardo pulp mill, which began production in July 2024 [3]. This facility alone contributed to a 28% sales increase year-over-year. Despite challenges like a 3.5% production dip due to Chinese market uncertainties, Suzano’s cash cost of R$832 per tonne of pulp remains industry-leading [4]. Over five years, its EBITDA has fluctuated but trended upward, from $2.931B in 2020 to $4.569B in 2024, reflecting operational discipline [5].

Institutional Ownership and Valuation Re-Rating

While Suzano’s ownership structure remains concentrated—private entities and insiders hold 45% of shares—its inclusion in the Ibovespa likely attracted institutional investors. As of June 2025, institutions held a “respectable stake,” and the company’s EV/EBITDA multiple dropped from 9.55x pre-2020 to 6.1x post-inclusion [6]. This re-rating suggests improved efficiency and investor confidence. Additionally, Suzano’s P/E ratio stabilized at 11.6x in 2025, up from a negative -7.36x in 2020 [7], indicating a shift from cyclical skepticism to growth optimism.

Sustainable Leadership and Long-Term Appeal

Suzano’s ESG credentials further bolster its case. Certified by FSC® and PEFC, the company manages 1.3 million hectares of eucalyptus forests, ensuring sustainable raw material sourcing [8]. Its alignment with global decarbonization trends positions it to benefit from green finance and corporate sustainability-linked procurement. With a net leverage target of 2-3x and a R$22.4 billion liquidity buffer, Suzano is well-positioned to fund growth without overleveraging [9].

Conclusion: A Strategic Entry Point

Suzano’s Ibovespa inclusion has amplified its market presence, while its operational and ESG strengths create a durable moat. For investors, the combination of a re-rated valuation (EV/EBITDA at 6.1x), robust EBITDA growth, and a leadership role in sustainable pulp production offers a compelling entry point. As Brazil’s forestry sector evolves, Suzano stands at the intersection of industrial efficiency and environmental stewardship—a rare alignment in today’s markets.

Source:
[1] Bovespa Index (Ibovespa) methodology [https://www.b3.com.br/en_us/market-data-and-indices/indices/broad-indices/ibovespa.htm]
[2] Suzano’s joint venture with Kimberly-Clark [https://valorinternational.globo.g.com/agribusiness/news/2025/06/06/with-kimberly-deal-suzano-expands-global-footprint.ghtml]
[3] Q2 2025 EBITDA and Ribas do Rio Pardo mill impact [https://www.suzano.com.br/news/second-quarter-results-suzano]
[4] Production costs and market challenges [https://www.ainvest.com/news/suzano-sa-q2-2025-earnings-call-highlights-strategic-moves-market-challenges-2508/]
[5] EBITDA trends from 2020–2024 [https://www.macrotrends.net/stocks/charts/SUZ/suzano-sa/ebitda]
[6] Valuation multiples pre- and post-inclusion [https://multiples.vc/public-comps/suzano-valuation-multiples]
[7] P/E ratio evolution [https://www.marketscreener.com/quote/stock/SUZANO-S-A-50914646/valuation/]
[8] Sustainable forestry certifications [https://www.suzano.com.br/en/suzano/transparency/certifications]
[9] Liquidity and leverage metrics [https://www.emspreads.com/p/suzano-4q24-2031s-and-2032s-offer]