Cellulose-based products maker Rayonier Advanced Materials (RYAM) has raised the prices of all its Cellulose Specialties products by at least 15% to 30% depending on product grade, as contracts allow. Following the announcement, shares of the company jumped 4.4% in extended trade on Monday.
Headquartered in Florida, Rayonier manufactures over 25 grades of high-purity performance fibers for products, including cosmetics, food, paints, pharmaceuticals, filters, impact-resistant plastics and digital display screens, among others.
The company has increased the prices to offset the impact of cost inflation across its global supply chain. (See Rayonier stock chart on TipRanks)
The President and CEO of Rayonier, Paul Boynton, said, “As the company has entered the second half of 2021, it has been confronted by the realities of substantial cost inflation. Specifically, the company is experiencing marked increases with respect to four core components of its Cellulose Specialties input costs — fiber, chemicals, energy and freight — and the company currently expects these increases to continue well into 2022.”
“These actions are a necessary step in the current global environment and will supplement ongoing cost- and efficiency-improvement initiatives at the company’s four best-in-class High Purity Cellulose facilities,” Boynton added.
Two months ago, RBC Capital analyst Paul Quinn upgraded the stock to Buy from Hold and increased the price target from $9 to $10 (32.5% upside potential).
The analyst said, “In the short-term, we think hardwood dissolving pulp capacity additions are likely to weigh on the HPC segment, but Rayonier should be able to avoid the worst of it by taking advantage of strengthening specialty cellulose market conditions.”
Overall, the stock has a Moderate Buy consensus rating based on 2 Buys. The average Rayonier Advanced Materials price target of $9.25 implies 22.5% upside potential. Shares have gained 97.6% over the past year.
Related News:
Bed Bath & Beyond Launches Studio 3B; Shares Fall 5.3%
Verizon, CareAR Join Hands to Enhance Customer Experience
Accuray Inks Deal with C-RAD to Enhance Breast Cancer Treatment
