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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 2.4% over the past month. The stock hit a new 52-week high of $73.84 in the previous session. Sylvamo Corporation has gained 45.8% since the start of the year compared to the -1.1% move for the Zacks Basic Materials sector and the 10.3% 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 May 10, 2024, Sylvamo reported EPS of $1.07 versus consensus estimate of $1.05.
Valuation Metrics
While Sylvamo has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
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 B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 10.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 17.1X. On a trailing cash flow basis, the stock currently trades at 7.1X versus its peer group's average of 6.4X. 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 #2 (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 meets the list of requirements. Thus, it seems as though Sylvamo shares could have potential in the weeks and months to come.
How Does SLVM Stack Up to the Competition?
Shares of SLVM have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Stora Enso Oyj (SEOAY - Free Report) . SEOAY has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of D, and a Momentum Score of B.
Earnings were strong last quarter. Stora Enso Oyj beat our consensus estimate by 150%, and for the current fiscal year, SEOAY is expected to post earnings of $0.55 per share on revenue of $9.66 billion.
Shares of Stora Enso Oyj have gained 1.6% over the past month, and currently trade at a forward P/E of 24.87X and a P/CF of 13.69X.
The Paper and Related Products industry is in the top 12% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SLVM and SEOAY, even beyond their own solid fundamental situation.
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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 2.4% over the past month. The stock hit a new 52-week high of $73.84 in the previous session. Sylvamo Corporation has gained 45.8% since the start of the year compared to the -1.1% move for the Zacks Basic Materials sector and the 10.3% 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 May 10, 2024, Sylvamo reported EPS of $1.07 versus consensus estimate of $1.05.
Valuation Metrics
While Sylvamo has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
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 B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 10.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 17.1X. On a trailing cash flow basis, the stock currently trades at 7.1X versus its peer group's average of 6.4X. 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 #2 (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 meets the list of requirements. Thus, it seems as though Sylvamo shares could have potential in the weeks and months to come.
How Does SLVM Stack Up to the Competition?
Shares of SLVM have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Stora Enso Oyj (SEOAY - Free Report) . SEOAY has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of D, and a Momentum Score of B.
Earnings were strong last quarter. Stora Enso Oyj beat our consensus estimate by 150%, and for the current fiscal year, SEOAY is expected to post earnings of $0.55 per share on revenue of $9.66 billion.
Shares of Stora Enso Oyj have gained 1.6% over the past month, and currently trade at a forward P/E of 24.87X and a P/CF of 13.69X.
The Paper and Related Products industry is in the top 12% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SLVM and SEOAY, even beyond their own solid fundamental situation.