Although it’s true that many FTSE 100 stocks are mature companies, it doesn’t mean there isn’t still potential for large growth. This is particularly evident when it comes to firms that have experienced a share price fall.
Any bounce back could offer large potential rewards for a shrewd investor. So what’s the opportunity I might have spotted?
Looking through the weeds
I’m talking about Mondi (LSE:MNDI). The business produces paper and packaging products used in everyday life. Given that the stock’s down 34% over the past year, let’s address that to start with.
In classic cyclical fashion, Mondi’s been hit by a perfect storm. Profits fell sharply in 2025, with earnings dropping nearly 30% as selling prices weakened and demand softened. At the same time, costs have surged. Energy and raw material expenses have all jumped, something that has worsened recently due to geopolitical tensions and higher oil prices.
This has squeezed profit margins, with the share price falling amid disappointing earnings. To make matters worse, management cut the dividend in February and announced plant closures and job cuts, which are hardly confidence-boosting signals for investors.
A comeback king?
When I look at analyst forecasts, there’s a strong indication that the stock might have fallen too far. Of the 15 contributors putting out a rating, the average 12-month target price is 978p. From the current price of 735p, that’s a 33% difference. So if those forecasts prove to be correct, buying now could deliver a healthy return.
Of course, these are subjective views. Even though these analysts are experts, there’s no guarantee the share price will hit that price. However, when I look at the fundamental picture, I think there are several reasons to be optimistic.
For a start, Mondi’s actively pushing through price increases to offset the higher costs I mentioned earlier, although there’s a lag before this feeds into profits.
In a trading update from earlier this month, sales volumes for Q1 increased, which suggests to me that underlying demand hasn’t disappeared. The company said volume gains were “supported by recent capacity expansions, as well as our exposure to diversified geographies, end markets and products”.
There’s also a bigger structural story. Packaging demand is closely tied to e-commerce and sustainability trends. As companies shift away from plastic and towards recyclable materials, Mondi’s paper-based solutions could be well-positioned over the long term. Granted, this maybe isn’t as relevant to the share price over the next 12 months, but it does provide sound reasoning for those with a Foolish long-term investment timeframe.
Weighing things up
The views from analysts, along with some encouraging signs from the latest trading update, mean that I get why this could be seen as a cheap purchase. However, risks around elevated costs weighing on profits is an ongoing concern.
On that basis, I’m thinking about allocating a small amount to the stock, and will look to pound-cost-average over time. Investors with a similar view to me could consider this too.
