The company projects a notable enhancement in its quarterly earnings for the latter half of the year. This positive outlook stems from reduced costs associated with planned maintenance outages, alongside anticipated improvements in commercial performance and operational efficiencies. As a result, SLVM expects to see a significant financial boost moving forward.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for Sylvamo Corp (SLVM, Financial) is $78.67 with a high estimate of $93.00 and a low estimate of $70.00. The average target implies an upside of 30.68% from the current price of $60.20. More detailed estimate data can be found on the Sylvamo Corp (SLVM) Forecast page.
Based on the consensus recommendation from 3 brokerage firms, Sylvamo Corp's (SLVM, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Sylvamo Corp (SLVM, Financial) in one year is $50.12, suggesting a downside of 16.74% from the current price of $60.2. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Sylvamo Corp (SLVM) Summary page.
SLVM Key Business Developments
Release Date: February 12, 2025
- Return on Invested Capital: 23% for 2024.
- Debt Repayment: $154 million repaid, achieving a net debt to adjusted EBITDA of 0.9 times.
- Adjusted EBITDA: $632 million with a 17% margin for the full year 2024.
- Free Cash Flow: $248 million generated in 2024.
- Cash Returned to Shareholders: $130 million in 2024.
- Reinvestment: $221 million reinvested in manufacturing and Brazil forest land.
- Adjusted Operating Earnings: $7.42 per share, a 14% increase from 2023.
- Fourth Quarter Adjusted EBITDA: $157 million with a 16% margin.
- Fourth Quarter Free Cash Flow: $100 million.
- Fourth Quarter Adjusted Operating Earnings: $1.09 per share.
- Cost Reduction Program Savings: Exceeded $110 million goal by $34 million.
- First Quarter 2025 EBITDA Outlook: $85 million to $105 million.
- Capital Spending Plan for 2025: $220 million to $240 million.
- Debt Reduction: Reduced by almost 50% from over $1.5 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sylvamo Corp (SLVM, Financial) achieved a 23% return on invested capital in 2024, demonstrating strong execution of their strategy.
- The company improved its financial position by repaying $154 million in debt, achieving a net debt to adjusted EBITDA ratio of 0.9 times.
- Sylvamo Corp (SLVM) generated $248 million in free cash flow and returned $130 million in cash to shareholders.
- The company exceeded its Project Horizon cost reduction goals by $34 million, achieving significant savings across manufacturing and supply chain operations.
- Sylvamo Corp (SLVM) is investing in high-return projects, such as those at the Luis Antonio mill, which are yielding internal rates of return of 25% and 40%.
Negative Points
- Pricing mix was unfavorable by $18 million in the fourth quarter, driven by lower pulp and paper pricing in Europe and a worse mix in North America.
- Input and transportation costs increased by $9 million due to higher energy prices and transportation costs.
- The company expects first-quarter EBITDA to be lower, between $85 million to $105 million, due to unfavorable pricing and volume projections.
- Sylvamo Corp (SLVM) anticipates increased maintenance costs in the first half of 2025, with 80% of planned maintenance outages occurring during this period.
- The company faces challenges in Europe with a cost curve that has increased due to higher energy and wood costs, impacting pricing and market share.
