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Sylvamo Corporation (SLVM) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Sylvamo Corporation (SLVM - Free Report) ? Shares have been on the move with the stock up 6.6% over the past month. The stock hit a new 52-week high of $65.38 in the previous session. Sylvamo Corporation has gained 32.7% since the start of the year compared to the -3.4% move for the Zacks Basic Materials sector and the 8.2% return for the Zacks Paper and Related Products industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 15, 2024, Sylvamo reported EPS of $1.16 versus consensus estimate of $0.82.
Valuation Metrics
Sylvamo may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Sylvamo has a Value Score of A. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 10.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 12.1X. On a trailing cash flow basis, the stock currently trades at 6.4X versus its peer group's average of 5.7X. Additionally, the stock has a PEG ratio of 0.35. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Sylvamo currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Sylvamo fits the bill. Thus, it seems as though Sylvamo shares could have a bit more room to run in the near term.
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Sylvamo Corporation (SLVM) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Sylvamo Corporation (SLVM - Free Report) ? Shares have been on the move with the stock up 6.6% over the past month. The stock hit a new 52-week high of $65.38 in the previous session. Sylvamo Corporation has gained 32.7% since the start of the year compared to the -3.4% move for the Zacks Basic Materials sector and the 8.2% return for the Zacks Paper and Related Products industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 15, 2024, Sylvamo reported EPS of $1.16 versus consensus estimate of $0.82.
Valuation Metrics
Sylvamo may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Sylvamo has a Value Score of A. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 10.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 12.1X. On a trailing cash flow basis, the stock currently trades at 6.4X versus its peer group's average of 5.7X. Additionally, the stock has a PEG ratio of 0.35. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Sylvamo currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Sylvamo fits the bill. Thus, it seems as though Sylvamo shares could have a bit more room to run in the near term.