Suzano Papel e Celulose SA (SUZ) AI Stock Analysis

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Suzano Papel e Celulose SA

(NYSE:SUZ)

Rating:58Neutral

Price Target:

$9.50

▲(4.17%Upside)

Suzano's stock score is influenced by strong operational efficiency and cash flow, offset by high leverage and a net loss affecting profitability. Technical indicators are mixed, showing some short-term weakness. The valuation is supported by a decent dividend yield but lacks a P/E ratio for a full assessment. The company's strategic focus on deleveraging and improving cost efficiency is a positive note.

Positive Factors

Cost Leadership

Suzano continues to strengthen its position as a global cost leader in pulp production by addressing structural challenges through innovative strategies.

Financial Performance

Suzano reported 3Q24 EBITDA at R$6.5bn, 6% above consensus, driven by stronger pulp shipments and higher paper shipments.

Valuation

Suzano is trading at an attractive valuation compared to its historical EV/EBITDA, offering a potential investment opportunity.

Negative Factors

Supply and Demand

The company’s outlook for S&D indicates that supply should outpace demand by 2028 – likely triggering pulp price pressure to balance out markets.

Suzano Papel e Celulose SA (SUZ) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$11.70B

Dividend Yield2.83%

Average Volume (3M)1.60M

Price to Earnings (P/E)15.7

Beta (1Y)0.38

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees35,000

SectorBasic Materials

Sector Strength65

IndustryPaper, Lumber & Forest Products

Share Statistics

EPS (TTM)0.91

Shares Outstanding1,264,117,700

10 Day Avg. Volume1,512,617

30 Day Avg. Volume1,597,915

Financial Highlights & Ratios

PEG Ratio3.02

Price to Book (P/B)1.73

Price to Sales (P/S)0.00

P/FCF Ratio10.04

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$18.00

Price Target Upside97.37% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Suzano Papel e Celulose SA Business Overview & Revenue Model

Company DescriptionSuzano S.A. produces and sells eucalyptus pulp and paper products in Brazil and internationally. It operates through Pulp and Paper segments. The company offers coated and uncoated printing and writing papers, paperboards, tissue papers, and market and fluff pulps; and lignin and its byproducts. It also engages in the research, development, and production of biofuel; operation of port terminals; power generation and distribution business; commercialization of equipment and parts; biotechnology research and development; and commercialization of paper and computer materials. In addition, the company is involved in the business office, production packaging, and financial fundraising activities; research, development, production, commercialization, and distribution of wood-based textile fibers, yarns, and filaments produced from cellulose and microfibrillated cellulose; and research and development of wood raw materials for the textile industry. Suzano S.A. was formerly known as Suzano Papel e Celulose S.A. and changed its name to Suzano S.A. in April 2019. The company was founded in 1924 and is headquartered in Salvador, Brazil.

How the Company Makes MoneySuzano Papel e Celulose SA generates revenue primarily through the sale of its pulp and paper products. The company operates a vertically integrated business model, which involves managing its own eucalyptus plantations, manufacturing pulp and paper, and distributing its products worldwide. Key revenue streams include the sale of hardwood pulp, which is used by other manufacturers for various applications, and the sale of finished paper products such as printing and writing paper, tissue, and packaging materials. Suzano's earnings are supported by its strong market presence in both domestic and international markets, strategic partnerships, and long-term contracts with key customers. Additionally, the company's focus on sustainability and innovation enhances its competitiveness and appeal in the growing global market for environmentally friendly paper products.

Suzano Papel e Celulose SA Earnings Call Summary

Earnings Call Date:May 09, 2025

(Q1-2025)

% Change Since: 1.56%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted Suzano's strategic focus on deleveraging and improving operational efficiency amidst global market uncertainties. While there were notable improvements in packaging performance and sales volume growth, challenges in the pulp market and increased costs due to maintenance impacted overall results.

Q1-2025 Updates

Positive Updates

Sales Volume Growth and Price Increases

Suzano achieved sales volume growth on a year-over-year basis with improvements in Suzano packaging operations. Increases in pricing were noted in both Brazilian and American operations, contributing to higher net prices.

Strong Packaging Performance

Suzano packaging saw a 62% increase in sales volume quarter-over-quarter and a 67% improvement in EBITDA, indicating a successful turnaround strategy.

Cash Cost Management

Cash production cost excluding downtimes increased by 6% as expected, mainly due to maintenance downtimes, but a reduction is anticipated for the coming quarters.

Deleveraging Focus

Suzano remains committed to deleveraging, maintaining a leverage of 3 times net debt to EBITDA, and achieved a competitive cost of capital during the quarter.

Negative Updates

Pulp Market Uncertainty

The pulp market faced challenges with declining order intake in Asia and uncertainty due to global trade tensions affecting customer sentiment.

Higher Costs in Brazilian Operations

Higher costs were reported due to annual maintenance downtimes, impacting the financial results of Brazilian operations.

International Market Pressure

International paper and pulp markets continued to be oversupplied, with price pressures due to ongoing trade discussions and tariffs affecting market dynamics.

Increased Net Debt

Net debt increased slightly to $12.9 billion by the end of the quarter, with a small uptick in leverage from 2.9 times to 3 times net debt to EBITDA.

Company Guidance

During the first quarter of 2025, Suzano's financial guidance indicated that several key metrics aligned with management's expectations. The company successfully rebuilt its inventory to normalized levels despite the concentration of maintenance downtimes. Pulp and paper invoicing prices, cash cost performance, capital expenditures (CapEx), and main balance sheet metrics met management's forecasts. Suzano emphasized its ability to generate free cash flow under any pulp price scenario due to its resilient business model, while also aiming to further reduce cash costs, SG&A, and CapEx per ton. Additionally, the company maintained its focus on deleveraging and enhancing its competitive position amid an unpredictable global landscape, ensuring financial strength and operational efficiency.

Suzano Papel e Celulose SA Financial Statement Overview

Summary

Suzano Papel e Celulose SA displays robust operational efficiency and cash flow generation, but its profitability is challenged by a substantial net loss in 2024. The high debt-to-equity ratio indicates significant leverage risk, though the company maintains strong cash reserves. The revenue growth and operational margins are positive, but high leverage and profitability issues need addressing for long-term stability.

Income Statement

Neutral

The company shows volatility in net income, with a significant net loss in 2024 compared to a high net income in 2023. Revenue growth from 2023 to 2024 is strong at 19.21%, but this is overshadowed by a negative net profit margin due to the net loss. The gross profit margin is stable, and both EBIT and EBITDA margins remain robust, indicating operational efficiency despite the net loss.

Balance Sheet

Neutral

The balance sheet reflects a high debt-to-equity ratio, indicating significant leverage, which poses financial risk. Stockholders' equity has decreased, and the equity ratio is relatively low, highlighting potential instability. However, the company maintains substantial cash reserves, which provide some liquidity cushion.

Cash Flow

Positive

Operating cash flow is strong and shows growth, but free cash flow has improved notably from negative in 2023 to positive in 2024. The company effectively converts operating cash flow into free cash flow, though the free cash flow to net income ratio is impacted by the net loss.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
37.94B	47.40B	39.76B	49.83B	40.97B	30.46B
	Gross Profit
16.08B	20.00B	14.68B	25.01B	20.35B	11.49B
	EBIT
13.00B	15.69B	12.22B	22.22B	18.18B	8.44B
	EBITDA
21.75B	23.46B	29.40B	30.63B	24.62B	12.23B
	Net Income Common Stockholders
-7.29B	-7.07B	14.08B	23.38B	8.63B	-10.71B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.97B	21.99B	21.17B	17.05B	21.10B	9.05B
	Total Assets
135.37B	165.94B	143.59B	133.20B	118.98B	101.80B
	Total Debt
78.85B	108.41B	83.42B	80.76B	85.52B	78.09B
	Net Debt
74.09B	99.39B	75.07B	71.25B	71.93B	71.26B
	Total Liabilities
97.07B	133.52B	98.78B	100.03B	103.80B	94.46B
	Stockholders Equity
38.19B	32.28B	44.69B	33.06B	15.08B	7.23B
Cash Flow		Free Cash Flow
6.62B	4.07B	-241.59M	6.80B	11.39B	8.23B
	Operating Cash Flow
21.97B	20.60B	17.32B	21.64B	17.64B	13.12B
	Investing Cash Flow
-11.15B	-20.51B	-26.04B	-17.02B	-10.36B	-736.42M
	Financing Cash Flow
-5.39B	-83.77M	7.80B	-8.11B	-1.57B	-9.79B

Suzano Papel e Celulose SA Technical Analysis

Technical Analysis Sentiment

Negative

Last Price9.12

Price Trends

50DMA

9.16

Negative

100DMA

9.64

Negative

200DMA

9.75

Negative

Market Momentum

MACD

0.07

Negative

RSI

46.20

Neutral

STOCH

28.22

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SUZ, the sentiment is Negative. The current price of 9.12 is below the 20-day moving average (MA) of 9.17, below the 50-day MA of 9.16, and below the 200-day MA of 9.75, indicating a bearish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 46.20 is Neutral, neither overbought nor oversold. The STOCH value of 28.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SUZ.

Suzano Papel e Celulose SA Risk Analysis

Suzano Papel e Celulose SA disclosed 45 risk factors in its most recent earnings report. Suzano Papel e Celulose SA reported the most risks in the “Finance & Corporate” category.

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

Latest Risks Added 0 New Risks

Suzano Papel e Celulose SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (50)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SXT	74 Outperform	$3.99B	31.10	11.87%	1.75%	6.30%	41.01%
SLVM	67 Neutral	$2.26B	8.14	31.83%	3.32%	0.11%	46.54%
CLW	60 Neutral	$470.28M	33.74	-8.15%	―	-15.03%	-233.06%
SUZ	58 Neutral	$11.70B	15.71	-17.36%	2.83%	―	―
MATV	58 Neutral	$303.21M	4.60	-66.90%	7.21%	-7.46%	-36.14%
MERC	51 Neutral	$238.73M	―	-17.96%	8.40%	-1.37%	60.42%
Sector *	50 Neutral	$2.00B	-1.13	-21.16%	3.71%	2.15%	-30.95%

* Basic Materials Sector Average

Performance Comparison

SUZ

Suzano Papel e Celulose SA

9.12

-0.20

-2.15%

CLW

Clearwater Paper

30.30

-21.69

-41.72%

MERC

Mercer International

3.56

-5.89

-62.33%

MATV

Mativ Holdings

5.83

-11.74

-66.82%

SXT

Sensient Technologies

95.36

22.00

29.99%

SLVM

Sylvamo Corp

55.58

-14.44

-20.62%

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.