Domtar (NYSE:UFS) (TSE:UFS) was downgraded by Zacks Investment Research from a “buy” rating to a “sell” rating in a note issued to investors on Tuesday.
According to Zacks, “Despite higher revenues, Domtar missed on fourth-quarter 2017 earnings due to higher operating costs. Adverse foreign currency translation against pulp purchasing currencies is expected to hamper price realizations of Domtar's pulp products. The company faces tremendous competitive pressure from local as well as some global producers, who often have relatively greater financial resources and lower production costs. The revamped market dynamics following Brexit are expected to affect firms like Domtar that has significant presence in the U.K. Brexit could further result in higher tariff and non-tariff barriers to trade between the U.K. and the European Union, lowering its productivity. Domtar has also underperformed the industry in the past three months. However, the company is streamlining the cost structure, improving revenue quality and maintaining a healthy cash flow to improve its future performance.”
A number of other research firms have also weighed in on UFS. UFS lowered Domtar from an “outperform” rating to a “market perform” rating in a research note on Monday, January 29th. Raymond James Financial lowered Domtar from an “outperform” rating to a “market perform” rating in a research note on Monday, January 29th. Royal Bank of Canada lowered Domtar from an “outperform” rating to a “sector perform” rating and set a $50.00 price objective for the company. in a research note on Friday, January 12th. They noted that the move was a valuation call. Vertical Group lowered Domtar from a “buy” rating to a “hold” rating in a research note on Thursday, January 4th. Finally, ValuEngine raised Domtar from a “hold” rating to a “buy” rating in a research note on Friday, February 2nd. Four research analysts have rated the stock with a sell rating, eight have issued a hold rating and six have issued a buy rating to the company’s stock. The stock has an average rating of “Hold” and an average price target of $44.33.
Domtar (NYSE:UFS) (TSE:UFS) last released its quarterly earnings data on Thursday, February 8th. The basic materials company reported $0.64 earnings per share for the quarter, missing analysts’ consensus estimates of $0.69 by ($0.05). The business had revenue of $1.34 billion during the quarter, compared to the consensus estimate of $1.31 billion. Domtar had a positive return on equity of 6.00% and a negative net margin of 4.11%. The business’s revenue was up 4.9% on a year-over-year basis. During the same period last year, the company earned $0.75 EPS. equities research analysts expect that Domtar will post 2.86 EPS for the current fiscal year.
Institutional investors have recently made changes to their positions in the stock. AXA bought a new position in Domtar during the third quarter valued at approximately $6,530,000. California Public Employees Retirement System boosted its stake in Domtar by 1.9% during the third quarter. California Public Employees Retirement System now owns 255,794 shares of the basic materials company’s stock valued at $11,099,000 after buying an additional 4,678 shares during the last quarter. Schwab Charles Investment Management Inc. boosted its stake in Domtar by 4.0% during the third quarter. Schwab Charles Investment Management Inc. now owns 288,828 shares of the basic materials company’s stock valued at $12,533,000 after buying an additional 11,078 shares during the last quarter. Sit Investment Associates Inc. boosted its stake in Domtar by 6.4% during the third quarter. Sit Investment Associates Inc. now owns 77,090 shares of the basic materials company’s stock valued at $3,345,000 after buying an additional 4,659 shares during the last quarter. Finally, State Street Corp boosted its stake in Domtar by 0.5% during the second quarter. State Street Corp now owns 1,772,703 shares of the basic materials company’s stock valued at $68,104,000 after buying an additional 8,827 shares during the last quarter. 90.59% of the stock is 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.
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