Sappi (SPPJY) AI Stock Analysis

• Market Cap: $768.24M
• Dividend Yield: 7.82%
• Average Volume (3M): 30.00
• Price to Earnings (P/E): 7.9
• Beta (1Y): 1.10
• Revenue Growth: 2.63%
• EPS Growth: N/A
• Country: US
• Employees: 12,329
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -0.05
• Shares Outstanding: 604,641,500
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 30
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 3.85
• Enterprise Value/Revenue: 0.54
• Enterprise Value/Gross Profit: 4.66
• Enterprise Value/Ebitda: 4.73
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 60 Neutral
• Price Target: $1.50 ▲(14.50% Upside)

Sappi's overall stock score reflects a challenging financial and operational environment. The most significant factors are the mixed financial performance and negative sentiment from the earnings call. While the valuation is attractive, technical indicators suggest bearish momentum, limiting immediate upside potential.

Sappi Business Overview & Revenue Model

Company Description

Sappi Limited is a global leader in the production of wood fiber-based products, operating primarily in the forest products sector. The company is headquartered in South Africa and has a diverse portfolio that includes the manufacturing of dissolving wood pulp, paper, and paper-based products. Sappi serves various end-use markets, including packaging, graphic papers, and specialty papers, focusing on sustainable practices and innovation to meet customer needs across the globe.

How the Company Makes Money

Sappi generates revenue primarily through the sale of its wood fiber-based products, which include dissolving wood pulp, paper, and paper products. The company has key revenue streams from its three main segments: Sappi Southern Africa, Sappi Europe, and Sappi North America. Each segment focuses on different markets and product types, allowing Sappi to diversify its income. Additionally, Sappi engages in partnerships and collaborations with various stakeholders in the value chain, enhancing its product offerings and market reach. The demand for sustainable and environmentally friendly products, along with Sappi's emphasis on innovation and efficiency in production, significantly contributes to its earnings.

Sappi Financial Statement Overview

Summary

Sappi's financial performance is mixed, with operational efficiency and a stable balance sheet. However, significant revenue decline and negative free cash flow are concerning, necessitating improvements in profitability and cash flow management.

Income Statement

Sappi's income statement shows mixed results. The TTM data indicates a decline in revenue growth rate by 88.4%, which is concerning. However, the company maintains a decent gross profit margin of 13.1% and an EBIT margin of 6.5%, reflecting operational efficiency. The net profit margin is low at 3.2%, indicating room for improvement in profitability.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.74, indicating moderate leverage. The return on equity is 7.3%, showing reasonable returns for shareholders. The equity ratio stands at 39.4%, suggesting a solid equity base relative to total assets.

Cash Flow

Cash flow analysis reveals challenges, with a negative free cash flow and a free cash flow to net income ratio of -1.46, indicating cash flow issues. However, the operating cash flow to net income ratio of 0.20 suggests some ability to generate cash from operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.50B	5.46B	5.81B	7.30B	5.26B	4.61B
Gross Profit	635.00M	776.00M	907.00M	1.37B	549.00M	399.00M
EBITDA	626.00M	497.00M	731.00M	1.08B	444.00M	283.00M
Net Income	96.00M	33.00M	259.00M	536.00M	13.00M	-135.00M
Balance Sheet
Total Assets	6.23B	6.21B	5.80B	6.23B	6.19B	5.46B
Cash, Cash Equivalents and Short-Term Investments	203.00M	317.00M	601.00M	780.00M	366.00M	279.00M
Total Debt	2.15B	1.74B	1.69B	1.94B	2.31B	2.24B
Total Liabilities	3.78B	3.63B	3.35B	3.87B	4.22B	3.82B
Stockholders Equity	2.45B	2.58B	2.44B	2.36B	1.97B	1.63B
Cash Flow
Free Cash Flow	-474.00M	-349.00M	223.00M	514.00M	33.00M	-91.00M
Operating Cash Flow	148.00M	124.00M	605.00M	882.00M	407.00M	260.00M
Investing Cash Flow	-588.00M	-430.00M	-395.00M	-376.00M	-378.00M	-517.00M
Financing Cash Flow	258.00M	-80.00M	-501.00M	-43.00M	33.00M	138.00M

Sappi Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.31
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPPJY, the sentiment is Negative. The current price of 1.31 is above the 20-day moving average (MA) of 1.28, below the 50-day MA of 1.42, and below the 200-day MA of 1.82, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 46.94 is Neutral, neither overbought nor oversold. The STOCH value of 73.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPPJY.

Sappi Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LPX	―	$5.99B	20.30	17.53%	1.23%	-1.44%	-31.12%
SLVM	―	$1.64B	7.79	24.37%	4.43%	-4.03%	-5.27%
Sector *	―	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
SUZ	―	$11.39B	8.05	18.34%	3.66%	11.48%	1773.12%
SPPJY	―	$768.24M	7.91	3.97%	7.82%	2.63%	―
CLW	―	$290.45M	-1.82	-10.47%	―	-21.76%	-1214.73%
MERC	―	$127.94M	-1.17	-23.39%	14.29%	-2.16%	44.89%

Sappi Corporate Events

Sappi Limited’s Earnings Call: Mixed Outlook with Strategic Initiatives

The latest earnings call from Sappi Limited presented a mixed sentiment, reflecting both challenges and opportunities. The company is grappling with lower profitability and difficulties in the European market, yet strategic initiatives like the Somerset PM2 ramp-up and debt reduction plans offer a promising long-term outlook. Positive signs include a recovery in dissolving pulp prices and market share gains in graphic papers, which are encouraging indicators for the company’s future.

Sappi Limited Reports Challenging Q3 2025 Results

Sappi Limited is a global leader in the production of woodfibre-based products, including packaging papers, graphic papers, pulp, and biomaterials, with a focus on sustainable and innovative practices. In its latest earnings report for the third quarter of 2025, Sappi faced significant challenges due to global economic weaknesses and trade tensions, resulting in a loss of $33 million compared to a profit of $51 million in the same period last year. Key financial metrics showed a decline, with revenue slightly down to $1,321 million and adjusted EBITDA falling to $80 million from $148 million in the previous year. The company’s net debt increased to $1,947 million, reflecting higher operational costs and currency translation effects.