Zacks Investment Research Downgrades Domtar Corp. (UFS) to Hold
Domtar Corp. (NYSE:UFS) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research report issued to clients and investors on Thursday.
According to Zacks, “Domtar has a decent earnings surprise history, having beaten estimates on all occasions in the trailing four quarters. The company is seeking growth through profitable investment opportunities with a commitment to pollution-free environment and sustainable practices. The strategic acquisition of Butterfly Health is expected to further augment its global footprint in healthcare markets. Domtar is also streamlining the cost structure, improving revenue quality and maintaining a healthy cash flow with a disciplined approach to cash utilization. However, the revamped market dynamics following Brexit are expected to affect firms like Domtar, which has significant presence in the U.K., with higher tariff and non-tariff barriers to trade affecting its profitability. Global demand for pulp is also likely to be volatile due to U.S. dollar strength and consumer inventory swings, especially in China.”
UFS has been the topic of a number of other research reports. DA Davidson downgraded Domtar Corp. from a “neutral” rating to an “underperform” rating and lowered their price target for the company from $42.00 to $30.00 in a report on Friday, July 8th. Goldman Sachs Group Inc. began coverage on Domtar Corp. in a report on Thursday, September 22nd. They set a “neutral” rating and a $40.00 price target on the stock. Moffett Nathanson upgraded Domtar Corp. from an “underperform” rating to a “neutral” rating in a research note on Monday. TheStreet upgraded Domtar Corp. from a “hold” rating to a “buy” rating in a research note on Wednesday, July 27th. Finally, Macquarie lowered their target price on Domtar Corp. from $45.00 to $41.00 and set an “outperform” rating on the stock in a research note on Thursday, September 15th. Two research analysts have rated the stock with a sell rating, seven have given a hold rating and two have issued a buy rating to the company’s stock. The company has a consensus rating of “Hold” and an average price target of $39.71.
Domtar Corp. (NYSE:UFS) opened at 37.76 on Thursday. The company’s 50-day moving average price is $37.05 and its 200 day moving average price is $37.67. The stock has a market capitalization of $2.36 billion, a P/E ratio of 26.39 and a beta of 1.64. Domtar Corp. has a 52-week low of $29.88 and a 52-week high of $42.95.
Domtar Corp. (NYSE:UFS) last issued its quarterly earnings results on Wednesday, July 27th. The company reported $0.61 earnings per share for the quarter, beating analysts’ consensus estimates of $0.13 by $0.48. Domtar Corp. had a return on equity of 6.84% and a net margin of 1.74%. The business had revenue of $1.27 billion for the quarter, compared to the consensus estimate of $1.26 billion. During the same quarter in the previous year, the company posted $0.61 earnings per share. Domtar Corp.’s revenue for the quarter was down 1.6% compared to the same quarter last year. On average, equities research analysts anticipate that Domtar Corp. will post $2.93 earnings per share for the current year.
The business also recently declared a quarterly dividend, which will be paid on Monday, October 17th. Shareholders of record on Monday, October 3rd will be given a $0.415 dividend. The ex-dividend date is Thursday, September 29th. This represents a $1.66 dividend on an annualized basis and a dividend yield of 4.40%. Domtar Corp.’s dividend payout ratio is currently 116.08%.
Several hedge funds have recently made changes to their positions in UFS. State Street Corp boosted its stake in shares of Domtar Corp. by 0.7% in the first quarter. State Street Corp now owns 1,753,431 shares of the company’s stock worth $71,015,000 after buying an additional 12,731 shares in the last quarter. CIBC World Markets Inc. boosted its position in Domtar Corp. by 173.3% in the second quarter. CIBC World Markets Inc. now owns 92,139 shares of the company’s stock valued at $3,226,000 after buying an additional 58,423 shares in the last quarter. LS Investment Advisors LLC boosted its position in Domtar Corp. by 72.9% in the second quarter. LS Investment Advisors LLC now owns 3,785 shares of the company’s stock valued at $133,000 after buying an additional 1,596 shares in the last quarter. Calvert Investment Management Inc. boosted its position in Domtar Corp. by 35.1% in the second quarter. Calvert Investment Management Inc. now owns 8,662 shares of the company’s stock valued at $303,000 after buying an additional 2,252 shares in the last quarter. Finally, BlackRock Fund Advisors boosted its position in Domtar Corp. by 10.9% in the first quarter. BlackRock Fund Advisors now owns 5,636,324 shares of the company’s stock valued at $228,271,000 after buying an additional 553,895 shares in the last quarter. 84.60% of the stock is owned by institutional investors.
About Domtar Corp.
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 operates through two business segments: Pulp and Paper, and Personal Care. Its Pulp and Paper segment is engaged in the designing, manufacturing, marketing and distribution of communication, specialty and packaging papers, as well as softwood, fluff and hardwood market pulp.
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