Sylvamo (NYSE:SLVM) Shares Gap Down Following Weak Earnings

Key Points

• Sylvamo Corporation experienced a significant gap down in its stock price, opening at $38.45 after reporting weaker than expected earnings, with an EPS of $0.37 compared to the consensus estimate of $0.47.
• The company has announced a quarterly dividend of $0.45 per share, resulting in an annualized dividend of $1.80 and a yield of 4.4%.
• Analysts have downgraded Sylvamo’s target price; Bank of America set a new target of $64.00 while Royal Bank of Canada revised it down to $61.00, suggesting lower expectations for the company's performance.

Sylvamo Corporation (NYSE:SLVM - Get Free Report) gapped down prior to trading on Friday following a weaker than expected earnings announcement. The stock had previously closed at $47.84, but opened at $38.45. Sylvamo shares last traded at $41.08, with a volume of 264,524 shares traded.

The company reported $0.37 EPS for the quarter, missing the consensus estimate of $0.47 by ($0.10). The firm had revenue of $794.00 million during the quarter, compared to analyst estimates of $826.60 million. Sylvamo had a net margin of 6.11% and a return on equity of 23.99%. The firm's quarterly revenue was down 14.9% on a year-over-year basis. During the same period last year, the business posted $1.98 earnings per share.

Sylvamo Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Tuesday, July 29th. Stockholders of record on Tuesday, July 8th were paid a $0.45 dividend. This represents a $1.80 annualized dividend and a dividend yield of 4.1%. The ex-dividend date of this dividend was Tuesday, July 8th. Sylvamo's dividend payout ratio (DPR) is 34.42%.

Analyst Upgrades and Downgrades

A number of equities research analysts recently commented on the company. Bank of America decreased their price objective on Sylvamo from $67.00 to $64.00 and set an "underperform" rating for the company in a research note on Wednesday, July 9th. Royal Bank Of Canada set a $49.00 price objective on Sylvamo and gave the stock a "sector perform" rating in a research note on Monday.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in SLVM. BI Asset Management Fondsmaeglerselskab A S bought a new position in Sylvamo during the first quarter worth about $61,000. Blue Trust Inc. lifted its holdings in Sylvamo by 54.0% during the second quarter. Blue Trust Inc. now owns 1,209 shares of the company's stock worth $61,000 after acquiring an additional 424 shares in the last quarter. Covestor Ltd lifted its holdings in Sylvamo by 464.5% during the fourth quarter. Covestor Ltd now owns 779 shares of the company's stock worth $62,000 after acquiring an additional 641 shares in the last quarter. EMC Capital Management bought a new position in Sylvamo during the second quarter worth about $184,000. Finally, First Citizens Bank & Trust Co. bought a new position in Sylvamo during the first quarter worth about $200,000. 91.16% of the stock is currently owned by institutional investors.

Sylvamo Trading Up 4.6%

The company has a fifty day simple moving average of $50.11 and a two-hundred day simple moving average of $59.47. The company has a quick ratio of 0.91, a current ratio of 1.54 and a debt-to-equity ratio of 0.80. The stock has a market capitalization of $1.80 billion, a P/E ratio of 8.47, a price-to-earnings-growth ratio of 1.59 and a beta of 1.00.

About Sylvamo

Sylvamo Corporation produces and markets uncoated freesheet for cutsize, offset paper, and pulp in Latin America, Europe, and North America. The company operates through Europe, Latin America, and North America segments. The Europe segment offers copy, tinted, and colored laser printing paper under REY Adagio and Pro-Design brands; and graphic and high-speed inkjet printing papers under the brand Jetstar; as well as produces uncoated freesheet papers.