Sylvamo (NYSE:SLVM) Shares Gap Down on Disappointing 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.

Shares of Sylvamo Corporation (NYSE:SLVM - Get Free Report) gapped down before the market opened on Friday after the company announced weaker than expected quarterly earnings. 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 trading hands.

The company reported $0.37 earnings per share for the quarter, missing analysts' consensus estimates of $0.47 by ($0.10). The company had revenue of $794.00 million during the quarter, compared to analyst estimates of $826.60 million. Sylvamo had a net margin of 7.71% and a return on equity of 32.60%. The firm's revenue for the quarter was down 14.9% compared to the same quarter last year. During the same quarter last year, the business earned $1.98 EPS.

Sylvamo Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Tuesday, July 29th. Shareholders of record on Tuesday, July 8th were issued a $0.45 dividend. This represents a $1.80 dividend on an annualized basis and a dividend yield of 4.4%. The ex-dividend date was Tuesday, July 8th. Sylvamo's dividend payout ratio (DPR) is 26.32%.

Wall Street Analyst Weigh In

A number of equities analysts have weighed in on the stock. Royal Bank Of Canada decreased their price target on shares of Sylvamo from $70.00 to $61.00 and set a "sector perform" rating on the stock in a report on Monday, May 12th. Bank of America decreased their price target on shares of Sylvamo from $67.00 to $64.00 and set an "underperform" rating on the stock in a report on Wednesday, July 9th.

Hedge Funds Weigh In On Sylvamo

Hedge funds and other institutional investors have recently made changes to their positions in the business. BI Asset Management Fondsmaeglerselskab A S acquired a new position in shares of Sylvamo during the 1st quarter valued at $61,000. Blue Trust Inc. lifted its holdings in shares of Sylvamo by 54.0% during the 2nd quarter. Blue Trust Inc. now owns 1,209 shares of the company's stock valued at $61,000 after acquiring an additional 424 shares in the last quarter. Covestor Ltd lifted its holdings in shares of Sylvamo by 464.5% during the 4th quarter. Covestor Ltd now owns 779 shares of the company's stock valued at $62,000 after acquiring an additional 641 shares in the last quarter. First Citizens Bank & Trust Co. acquired a new position in shares of Sylvamo during the 1st quarter valued at $200,000. Finally, DRW Securities LLC acquired a new position in shares of Sylvamo during the 4th quarter valued at $225,000. Institutional investors and hedge funds own 91.16% of the company's stock.

Sylvamo Price Performance

The firm has a market cap of $1.65 billion, a price-to-earnings ratio of 7.74, a price-to-earnings-growth ratio of 1.59 and a beta of 1.00. The company has a debt-to-equity ratio of 0.87, a quick ratio of 1.04 and a current ratio of 1.64. The company's fifty day moving average is $50.32 and its two-hundred day moving average is $59.89.

Sylvamo Company Profile

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.