Mercer International (MERC) AI Stock Analysis

• Market Cap: $125.93M
• Dividend Yield: 15.96%
• Average Volume (3M): 573.10K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.34
• Revenue Growth: -2.16%
• EPS Growth: 44.89%
• Country: US
• Employees: 3,580
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -1.21
• Shares Outstanding: 66,982,506
• 10 Day Avg. Volume: 721,608
• 30 Day Avg. Volume: 573,104
• PEG Ratio: 0.08
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 0.21
• P/FCF Ratio: 73.79
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $3.00
• Price Target Upside: 53.85% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): -3.3
• Revenue Forecast (FY): $1.89B

• Rating: 41 Neutral
• Price Target: $2.00 ▲(2.56% Upside)

Mercer International's overall stock score reflects significant financial and operational challenges, with declining revenues, high leverage, and weak cash flow. Technical indicators suggest bearish momentum, and valuation metrics highlight ongoing losses despite a high dividend yield. The earnings call further underscores the company's difficulties, although strategic initiatives offer some hope for future improvement.

Mercer International Business Overview & Revenue Model

Company Description

Mercer International Inc. (MERC) is a leading global producer of wood products, primarily operating in the forest products sector. The company is engaged in the production and sale of various wood-based products, including pulp, paper, and timber. With operations in North America and Europe, Mercer focuses on sustainable forestry practices and environmentally responsible manufacturing processes, catering to diverse markets across the globe.

How the Company Makes Money

Mercer International generates revenue primarily through the sale of its wood products, including market pulp, which is used to produce paper and other products, and solid wood products, such as lumber. The company benefits from a diversified customer base, including manufacturers of paper, packaging materials, and construction materials. Key revenue streams include the sale of pulp and timber, as well as related products. In addition, Mercer has established significant partnerships with various stakeholders in the supply chain, allowing them to optimize pricing and distribution. The company's focus on sustainable practices not only attracts environmentally conscious customers but also positions it favorably in a market increasingly driven by sustainability concerns. Fluctuations in global commodity prices, demand for paper products, and housing market trends also significantly impact the company's revenue.

Mercer International Financial Statement Overview

Summary

Mercer International is facing significant financial challenges, with declining revenues, negative profitability, high leverage, and weak cash flow generation. The company's financial health is under pressure, requiring improvements in operational efficiency, cost management, and debt reduction.

Income Statement

Mercer International's income statement reveals a challenging period with declining revenue and profitability. The TTM data shows a negative revenue growth rate of -2.3%, and net profit margin is also negative at -5.6%. Gross profit margin has decreased to 6.3%, indicating pressure on cost management. The EBIT and EBITDA margins are low at 0.2% and 8.8%, respectively, reflecting operational inefficiencies. The company needs to address these issues to improve its financial health.

Balance Sheet

The balance sheet indicates high leverage with a debt-to-equity ratio of 3.46, which poses a risk in terms of financial stability. Return on equity is negative at -23.9%, highlighting the company's struggle to generate returns for shareholders. The equity ratio stands at 18.8%, suggesting a relatively low proportion of equity financing. Overall, the balance sheet reflects financial strain and potential risks associated with high debt levels.

Cash Flow

Cash flow analysis shows significant challenges, with a negative free cash flow growth rate of -240.1% in the TTM period. The operating cash flow to net income ratio is 0.16, indicating limited cash generation relative to net income. The free cash flow to net income ratio is negative, reflecting cash flow difficulties. Improving cash flow management is crucial for the company's financial recovery.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.91B	2.04B	1.99B	2.28B	1.80B	1.42B
Gross Profit	84.64M	189.36M	-31.86M	498.20M	425.52M	130.60M
EBITDA	54.62M	15.01M	-9.07M	560.96M	478.78M	192.65M
Net Income	-172.48M	-85.14M	-242.06M	247.04M	170.99M	-17.23M
Balance Sheet
Total Assets	2.29B	2.26B	2.66B	2.73B	2.35B	2.13B
Cash, Cash Equivalents and Short-Term Investments	98.10M	184.93M	313.99M	354.03M	345.61M	361.10M
Total Debt	1.55B	1.49B	1.63B	1.36B	1.24B	1.20B
Total Liabilities	1.93B	1.83B	2.03B	1.89B	1.66B	1.53B
Stockholders Equity	359.53M	429.77M	635.41M	838.78M	694.02M	601.03M
Cash Flow
Free Cash Flow	-61.55M	5.89M	-205.33M	181.42M	21.39M	-37.60M
Operating Cash Flow	33.59M	90.20M	-69.00M	360.66M	182.21M	41.56M
Investing Cash Flow	-76.70M	-66.99M	-199.87M	-425.68M	-187.13M	-59.83M
Financing Cash Flow	-92.12M	-152.78M	228.62M	81.97M	-9.50M	26.32M

Mercer International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MERC, the sentiment is Negative. The current price of 1.95 is below the 20-day moving average (MA) of 2.31, below the 50-day MA of 2.70, and below the 200-day MA of 4.17, indicating a bearish trend. The MACD of -0.24 indicates Positive momentum. The RSI at 25.34 is Positive, neither overbought nor oversold. The STOCH value of 12.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MERC.

Mercer International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SLVM	69 Neutral	$1.74B	8.27	24.37%	4.18%	-4.03%	-5.27%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
MATV	58 Neutral	$702.00M	―	-68.30%	3.80%	0.39%	-505.37%
CLW	48 Neutral	$296.87M	―	-10.47%	―	-21.76%	-1214.73%
MERC	41 Neutral	$125.93M	―	-23.39%	15.96%	-2.16%	44.89%

Mercer International Corporate Events

Mercer International Faces Challenges Amid Market Uncertainties

Mercer International Inc. is a global forest products company operating in Germany, the USA, and Canada, specializing in pulp, lumber, and biofuels production. In its third-quarter 2025 earnings report, Mercer International revealed a challenging period marked by a significant operating EBITDA loss of $28.1 million and a net loss of $80.8 million, largely due to a non-cash inventory impairment and adverse market conditions. The company faced industry-wide challenges, including higher fiber costs and a decline in pulp market demand and pricing, which were exacerbated by global economic uncertainties and trade issues. Despite these setbacks, Mercer International continues to focus on its ‘One Goal One Hundred’ program, aiming for $100 million in cost savings and operational efficiencies by the end of 2026. Looking forward, Mercer International remains committed to improving liquidity and operational efficiency, with plans to reduce costs and capital expenditures while exploring strategic projects like carbon capture to enhance long-term sustainability.

Mercer International Faces Economic Challenges in Q3 2025, Advances Sustainability Initiatives

Mercer International Inc. reported a challenging third quarter in 2025, with an Operating EBITDA of negative $28.1 million and a net loss of $80.8 million. The company faced significant hurdles due to global economic uncertainties, higher fiber costs, and pulp substitution, leading to a non-cash inventory impairment. Despite these challenges, Mercer is advancing its ‘One Goal One Hundred’ program aimed at achieving $100 million in cost savings by the end of 2026. Additionally, Mercer is progressing with a carbon capture project at its Peace River mill, which is expected to enhance the mill’s long-term economic viability and sustainability. The company anticipates continued weak pulp prices in the fourth quarter, while lumber prices are expected to increase modestly in Europe and the U.S. due to tariffs and higher fiber costs.

The most recent analyst rating on (MERC) stock is a Hold with a $2.50 price target. To see the full list of analyst forecasts on Mercer International stock, see the MERC Stock Forecast page.