SLVM - Sylvamo downgraded to Sector Perform at RBC Capital

2023-08-10 18:05:55 ET

Sylvamo ( NYSE: SLVM ) on Thursday was downgraded to Sector Perform from a previous investment rating of Outperform by analysts at RBC Capital Markets. They said the maker of printing paper faces weak demand and destocking trends in Europe and North America.

“While uncoated freesheet (UFS) demand has been very slow through H1 2023 (year-over-year, demand is down 17% in North America, down 22% in Europe and down 7% in Latin America), management is taking a longer-term view on demand trends,” Paul C. Quinn, analyst at RBC, said in an August 10 report.

RBC lowered its earnings estimates and cut its price target for Sylvamo ( SLVM ) to $44 a share from $55 a share, based on a multiple of about 5 times Ebitda of $575 million for 2024.

Sylvamo ( SLVM ), whose brands include Hammermill and HP Papers, on Wednesday said Q2 sales rose 0.8% from a year earlier to $919 million, missing the consensus estimate of about $960 million.

Adjusted operating earnings fell 45% to $49 million, or $1.14 a share, from $89.9 million, or $2.02 a share, a year earlier. Adjusted EPS missed the consensus estimate of $1.19.

Sylvamo’s ( SLVM ) stock this year fell 14% through August 9, contrasting with a 10% gain for the Standard & Poor’s 400 midcap stock index ( SP400 ).

More on Sylvamo

• Sylvamo Corporation ( SLVM ) Q2 2023 Earnings Call Transcript
• Sylvamo Corporation - Catalyst Missing
• Sylvamo Corporation ( SLVM ) Q1 2023 Earnings Call Transcript
• SEE, Weyerhaeuser, Sylvamo upgraded to Buy at BofA
• Sylvamo Non-GAAP EPS of $2.51 beats by $0.11, revenue of $959M misses by $17.04M
• Avery Dennison upgraded, Packaging Corp. downgraded at BofA
• Sylvamo to acquire Stora Enso uncoated freesheet paper mill in Sweden for $150M
• Seeking Alpha’s Quant Rating on Sylvamo
• Earnings data for Sylvamo
• Dividend scorecard for Sylvamo

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