Zacks Investment Research Upgrades Domtar (UFS) to “Buy”

Domtar (NYSE:UFS) (TSE:UFS) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a research report issued to clients and investors on Wednesday. The brokerage currently has a $56.00 price target on the basic materials company’s stock. Zacks Investment Research‘s target price would indicate a potential upside of 12.77% from the company’s previous close.

According to Zacks, “Domtar is seeking growth through profitable investment opportunities with a commitment to pollution-free environment and sustainable practices. The company is also streamlining the cost structure, improving revenue quality and maintaining a healthy cash flow. Domtar is executing well on its strategy to expand its fiber-based business through acquisitions, strategic investments in capacity building and repurposing of assets. At the same time, Domtar continues to streamline its network to build a more cost-competent distribution channel. The company’s investment strategy takes a holistic view of the rapidly evolving market and deploys a dynamic capital allocation approach to execute its growth strategy. Domtar has outperformed the industry year to date. However, strengthening U.S. dollar against pulp purchasing currencies is expected to hamper price realizations of Domtar's pulp products.”

Other research analysts have also recently issued reports about the company. ValuEngine upgraded Domtar from a “hold” rating to a “buy” rating in a research note on Friday, September 8th. Scotiabank set a $41.00 price target on Domtar and gave the stock a “sector perform” rating in a research note on Monday, October 30th. National Bank Financial lifted their price target on Domtar from $42.00 to $46.00 and gave the stock a “sector perform” rating in a research note on Monday, October 30th. KeyCorp set a $33.00 price target on Domtar and gave the stock a “sell” rating in a research note on Thursday, October 12th. Finally, Stephens initiated coverage on Domtar in a research note on Tuesday, October 24th. They issued an “equal weight” rating and a $43.00 price target on the stock. Three research analysts have rated the stock with a sell rating, six have issued a hold rating and five have issued a buy rating to the stock. The company presently has an average rating of “Hold” and an average price target of $43.80.

Domtar (NYSE:UFS) traded up $0.01 during trading hours on Wednesday, reaching $49.66. The company had a trading volume of 207,800 shares, compared to its average volume of 563,553. Domtar has a one year low of $35.47 and a one year high of $50.19. The stock has a market cap of $3,112.74, a price-to-earnings ratio of 17.80, a PEG ratio of 3.76 and a beta of 1.54. The company has a quick ratio of 1.20, a current ratio of 2.29 and a debt-to-equity ratio of 0.40.

Domtar (NYSE:UFS) (TSE:UFS) last released its quarterly earnings results on Friday, October 27th. The basic materials company reported $1.03 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $0.73 by $0.30. The company had revenue of $1.29 billion for the quarter, compared to analyst estimates of $1.26 billion. Domtar had a return on equity of 9.93% and a net margin of 5.42%. Domtar’s quarterly revenue was up 1.7% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $1.13 EPS. analysts anticipate that Domtar will post 2.64 earnings per share for the current fiscal year.

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in UFS. Zurcher Kantonalbank Zurich Cantonalbank raised its stake in Domtar by 14.0% during the 2nd quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 2,610 shares of the basic materials company’s stock valued at $100,000 after acquiring an additional 320 shares during the last quarter. Cubist Systematic Strategies LLC grew its stake in Domtar by 176.1% in the third quarter. Cubist Systematic Strategies LLC now owns 2,905 shares of the basic materials company’s stock worth $126,000 after purchasing an additional 1,853 shares in the last quarter. Bridgewater Associates LP acquired a new position in Domtar in the second quarter worth about $200,000. Shelton Capital Management acquired a new position in Domtar in the third quarter valued at approximately $206,000. Finally, Teacher Retirement System of Texas acquired a new position in Domtar in the third quarter valued at approximately $224,000. 91.01% of the stock is currently owned by institutional investors.

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Domtar Company Profile

Domtar Corporation designs, manufactures, markets and distributes a range of fiber-based products, including communication papers, specialty and packaging papers and absorbent hygiene products. The Company segments include Pulp and Paper and Personal Care. The Pulp and Paper segment consists of the design, manufacturing, marketing and distribution of communication, specialty and packaging papers, as well as softwood, fluff and hardwood market pulp.

Analyst Recommendations for Domtar (NYSE:UFS)

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