Sylvamo Corp (SLVM) AI Stock Analysis

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Sylvamo Corp

(NYSE:SLVM)

68Neutral

Sylvamo Corp's strong financial performance and attractive valuation are key strengths, making it appealing for investors focused on value and income. However, weak technical indicators and market challenges, such as unfavorable pricing and volume issues, pose risks. The upcoming CEO transition is expected to maintain stability and growth, further supporting the stock's potential.

Sylvamo Corp (SLVM) vs. S&P 500 (SPY)

Market Cap

$2.45B

Dividend Yield2.99%

Average Volume (3M)450.38K

Price to Earnings (P/E)8.4

Beta (1Y)1.00

Revenue Growth0.91%

EPS Growth22.51%

CountryUS

Employees6,500

SectorBasic Materials

Sector Strength59

IndustryPaper, Lumber & Forest Products

Share Statistics

EPS (TTM)7.20

Shares Outstanding40,720,314

10 Day Avg. Volume319,926

30 Day Avg. Volume450,383

Financial Highlights & Ratios

PEG Ratio0.37

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.63

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit4.24

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$81.50

Price Target Upside35.45% Upside

Rating ConsensusHold

Number of Analyst Covering3

Sylvamo Corp Business Overview & Revenue Model

Company DescriptionSylvamo Corp (SLVM) is a global leader in the paper industry, dedicated to the production of uncoated freesheet paper, which is widely used for office printing, commercial printing, and other applications. The company operates in multiple sectors, including office, commercial, and industrial paper products, and is known for its strong portfolio of brands. Sylvamo's operations span across North America, Latin America, and Europe, showcasing its extensive reach and commitment to sustainability and innovation in the paper manufacturing sector.

How the Company Makes MoneySylvamo Corp makes money primarily through the manufacturing and sale of uncoated freesheet paper. The company's revenue model is centered around the production and distribution of various paper products used in offices, commercial settings, and industrial applications. Key revenue streams include sales of branded and private-label paper products to a diverse customer base that includes retailers, distributors, and direct consumers. Additionally, Sylvamo benefits from strategic partnerships and long-term contracts with major clients, which help stabilize its revenue flow. The company also focuses on optimizing its supply chain and production processes to manage costs effectively, contributing to its profitability.

Sylvamo Corp Financial Statement Overview

Summary

Sylvamo Corp exhibits strong financial performance with consistent revenue and cash flow growth. Despite high leverage, effective equity use mitigates risks, maintaining profitability and cash flow stability.

Income Statement

Positive

Sylvamo Corp demonstrated steady revenue growth over the years, with a 1.40% increase in 2024. Gross profit margins have remained robust, although net profit margins are moderate. The EBIT and EBITDA margins are solid, indicating efficient operating performance. However, the decline in gross profit from 2023 to 2024 suggests potential cost pressures.

Balance Sheet

Positive

The company's debt-to-equity ratio is relatively high, indicating significant leverage. However, the return on equity (ROE) is strong, reflecting effective use of shareholder capital. The equity ratio is moderate, suggesting a balanced approach to financing assets through equity and debt.

Cash Flow

Positive

Sylvamo Corp has shown strong operating cash flow, consistently exceeding net income, which is a positive indicator of cash generation efficiency. Free cash flow growth is impressive, particularly in 2024, reflecting effective capital management. The company maintains a healthy free cash flow to net income ratio, enhancing financial flexibility.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
3.77B	3.72B	3.63B	3.50B	3.01B
	Gross Profit
940.00M	912.00M	1.01B	1.19B	908.00M
	EBIT
302.00M	599.00M	536.00M	458.00M	194.00M
	EBITDA
302.00M	576.00M	645.00M	468.00M	352.00M
	Net Income Common Stockholders
302.00M	253.00M	336.00M	331.00M	170.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
205.00M	220.00M	360.00M	180.00M	95.00M
	Total Assets
2.60B	2.87B	2.71B	2.60B	2.91B
	Total Debt
804.00M	959.00M	1.03B	1.40B	26.00M
	Net Debt
599.00M	959.00M	672.00M	1.22B	-69.00M
	Total Liabilities
1.76B	1.97B	2.03B	2.42B	799.00M
	Stockholders Equity
847.00M	901.00M	678.00M	182.00M	2.11B
Cash Flow		Free Cash Flow
469.00M	294.00M	289.00M	473.00M	284.00M
	Operating Cash Flow
469.00M	504.00M	438.00M	549.00M	359.00M
	Investing Cash Flow
-221.00M	-377.00M	180.00M	127.00M	-79.00M
	Financing Cash Flow
-310.00M	-219.00M	-470.00M	-589.00M	-350.00M

Sylvamo Corp Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price60.17

Price Trends

50DMA

64.12

Negative

100DMA

71.87

Negative

200DMA

76.19

Negative

Market Momentum

MACD

-1.38

Negative

RSI

45.72

Neutral

STOCH

43.47

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SLVM, the sentiment is Neutral. The current price of 60.17 is above the 20-day moving average (MA) of 59.55, below the 50-day MA of 64.12, and below the 200-day MA of 76.19, indicating a neutral trend. The MACD of -1.38 indicates Negative momentum. The RSI at 45.72 is Neutral, neither overbought nor oversold. The STOCH value of 43.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SLVM.

Sylvamo Corp Risk Analysis

Sylvamo Corp disclosed 1 risk factors in its most recent earnings report. Sylvamo Corp reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Sylvamo Corp Peers Comparison

Overall Rating

UnderperformOutperform

Sector (49)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SLVM	68 Neutral	$2.45B	8.37	34.55%	2.99%	0.91%	22.51%
HCC	67 Neutral	$2.49B	9.90	5.20%	0.68%	-9.10%	-47.93%
CLW	62 Neutral	$429.15M	33.74	-8.15%	―	-15.03%	-233.06%
SID	55 Neutral	$2.18B	―	-17.19%	12.32%	-10.94%	-756.50%
RDUS	53 Neutral	$829.98M	―	-41.03%	2.55%	-2.75%	-339.59%
MERC	51 Neutral	$261.46M	―	-17.96%	7.67%	2.48%	65.00%
Sector *	49 Neutral	$1.95B	-1.37	-21.20%	3.73%	0.84%	-29.84%

* Basic Materials Sector Average

Performance Comparison

SLVM

Sylvamo Corp

60.17

-3.75

-5.87%

CLW

Clearwater Paper

26.40

-21.44

-44.82%

MERC

Mercer International

3.91

-6.45

-62.26%

SID

Companhia Siderúrgica Nacional

1.70

-0.86

-33.59%

RDUS

Schnitzer Steel Industries

29.43

11.43

63.50%

HCC

Warrior Met Coal

47.39

-17.09

-26.50%

Sylvamo Corp Earnings Call Summary

Earnings Call Date:Feb 12, 2025

(Q4-2024)

% Change Since: -20.95%|

Next Earnings Date:May 09, 2025

Earnings Call Sentiment Neutral

The earnings call showcased strong financial performance, debt reduction, and successful cost reduction initiatives. However, there were challenges related to unfavorable price and mix trends, volume issues, and increased costs, which balanced the overall positive achievements.

Q4-2024 Updates

Positive Updates

Strong Financial Performance and Debt Reduction

Sylvamo generated a 23% return on invested capital, repaid $154 million in debt, achieving a net debt-to-adjusted EBITDA of 0.9x, and returned $130 million in cash to shareholders.

Exceeding Cost Reduction Goals

The Project Horizon cost reduction program exceeded its $110 million year-end run rate saving goals by $34 million.

High-Return Investments in Latin America

Investments in the Luiz Antonio mill in Latin America show promising returns, with a $7 million investment yielding 25% IRR and a $1 million investment yielding 40% IRR.

Resilient Safety Culture

Strong emphasis on safety culture with proactive risk elimination and commitment to a safer environment.

Negative Updates

Unfavorable Price and Mix Trends

Price and mix were unfavorable by $18 million, with significant impacts from lower pulp and paper pricing in Europe and worse mix in North America.

Volume Challenges

Volume was lower than expected, particularly in North America, due to weak performance in the commercial printing and envelope market.

Higher Input and Transportation Costs

Input and transportation costs increased by $9 million due to transportation and seasonally higher energy prices.

Challenging Market Conditions

Lower demand projections in North America and pricing pressure in Brazilian export regions for paper.

Company Guidance

During Sylvamo's Fourth Quarter 2024 Earnings Call, Jean-Michel Ribiéras, Chairman and CEO, highlighted the company's strong performance metrics for the year. Sylvamo achieved a 23% return on invested capital, repaid $154 million in debt, and attained a net debt-to-adjusted EBITDA ratio of 0.9x. The company reported $632 million in adjusted EBITDA with a 17% margin, generated $248 million in free cash flow, and returned $130 million to shareholders. Additionally, Sylvamo reinvested $221 million to bolster its manufacturing capabilities and forestland in Brazil. The company exceeded its Project Horizon cost reduction goals by $34 million, achieving a year-end savings run rate of $144 million. Looking ahead to Q1 2025, Sylvamo projects adjusted EBITDA between $85 million and $105 million, with anticipated challenges in price and volume due to market conditions in Europe and Latin America. Despite these challenges, Sylvamo remains optimistic about delivering increased shareholder value through strategic reinvestments and maintaining a strong cash flow.

Sylvamo Corp Corporate Events

Executive/Board Changes

Sylvamo Announces CEO Transition Plans

Positive

Apr 16, 2025

On April 15, 2025, Sylvamo announced the retirement of CEO Jean-Michel Ribiéras, effective December 31, 2025, with John Sims set to succeed him as CEO starting January 1, 2026. Sims, who has been with Sylvamo since its inception, will transition from his current role as CFO to COO on May 1, 2025, before taking over as CEO. Don Devlin will replace Sims as CFO, bringing extensive experience from his tenure at International Paper. This leadership transition is expected to maintain Sylvamo’s strong market position and continue its growth trajectory.

Spark’s Take on SLVM Stock

According to Spark, TipRanks’ AI Analyst, SLVM is a Neutral.

Sylvamo Corp’s strong financial performance and strategic reinvestment drive a solid stock score, countered by market challenges and weak technical indicators. The stock is attractively valued, appealing to long-term investors.

To see Spark’s full report on SLVM stock, click here.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.