Following my second buy rating on Sylvamo (NYSE: SLVM ) the stock is +21% and still trades at <10x forward EBIT – a fact I still cannot believe for this company. A dollar ofEquity strategist [Bernard Holdings]. Objective view on the directional bias of markets. Technical expertise bridges the complex relationships between value drivers, capital flows and price action. Partners are represented over the cross-section of financial markets, from speculators, hedgers, long-term traders and the public. Research c ...

Financial Performance - Net income for Q3 2024 was $95 million ($2.27 per diluted share), up from $83 million ($1.98 per diluted share) in Q2 2024 [87]. - Net sales increased to $965 million in Q3 2024 from $933 million in the previous quarter, with adjusted EBITDA rising to $193 million and an adjusted EBITDA margin of 20% [87][111]. - Adjusted EBITDA for Q3 2024 was $193 million, compared to $158 million in Q3 2023, reflecting improved operational performance [111]. Segment Performance - North America segment net sales increased by $56 million in Q3 2024, primarily due to higher volumes, while operating profit rose by $23 million compared to the same period in 2023 [107][108]. - Latin America segment net sales increased by $1 million in Q3 2024, but operating profit decreased by $6 million due to higher input costs [102][103]. - Europe segment net sales increased by $10 million in Q3 2024, with operating profit rising by $17 million driven by higher sales prices and volumes [98][99]. Cost Management and Expectations - Planned maintenance outage expenses decreased significantly as there were no major planned outages during Q3 2024, contributing to stable operations and costs across all regions [88]. - The company anticipates an increase in input and transportation costs in Q4 2024, primarily due to transportation and seasonally higher energy costs [89]. - For Q4 2024, the company expects unfavorable price and mix due to pulp and paper price decreases in Europe and higher export mix in Latin America, while volume is anticipated to improve driven by Latin America [89]. Cash Flow and Capital Expenditures - Free Cash Flow for the nine months ended September 30, 2024, was $148 million, a decrease from $190 million for the same period in 2023, reflecting cash provided by operating activities of $305 million in 2024 compared to $337 million in 2023 [115][119]. - Total capital expenditures for the nine months ended September 30, 2024, were $157 million, or 5.6% of net sales, with $140 million allocated to maintenance and regulatory expenditures [124]. - Cash used for working capital components was $44 million for the nine months ended September 30, 2024, compared to cash provided of $3 million in 2023, indicating a significant shift in working capital management [120]. Debt Management and Strategic Investments - Cash used for financing activities in the nine months ended September 30, 2024, included $117 million for Term Loan F, $44 million for Term Loan A, and $93 million for redeeming Senior Notes, totaling significant debt management efforts [122]. - The company expects to spend approximately $30 million to $35 million on high-return projects in 2024, indicating a focus on strategic investments [124]. Operational Insights - Operating cash flow generation is sensitive to pricing and demand changes, with management emphasizing cost management and operational excellence to maintain cash flow [117]. - The decrease in cash provided by operating activities in 2024 was primarily due to the timing of cash flows related to working capital [119]. - The company anticipates annual maintenance, regulatory, and reforestation capital expenditures to be in the range of $175 million to $190 million for the next several years [124]. Accounting Policies - The company has not made any changes to its critical accounting policies during the first nine months of 2024, maintaining consistency in financial reporting [128].

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $193 million with a margin of 20%, exceeding the outlook of $170 million to $185 million and increasing by almost $30 million from the prior quarter [6][9] - Free cash flow generation was $119 million, and adjusted operating earnings were $2.44 per share [6][19] - The company is on target to exceed its $110 million year-end run rate savings goal by up to $10 million due to Project Horizon [5][11] Business Line Data and Key Metrics Changes - Price and mix were unfavorable by $4 million, primarily due to North America mix, while volume increased by $10 million driven by North America [7][8] - Planned maintenance outages costs decreased by $28 million as there were no major planned outages in the quarter [7] - Input and transportation costs increased by $4 million, with negative fiber costs in Latin America offsetting positive costs in North America [8] Market Data and Key Metrics Changes - European demand for uncoated freesheet is estimated to decline by 2% next year, while supply is expected to drop by 7% due to mill closures [16] - North America demand is estimated to decline by 3%, with supply expected to drop by 10% [16] - Latin America demand and supply are expected to remain stable in 2025 [16] Company Strategy and Development Direction - The company aims to be a low-cost producer and continues to focus on Project Horizon to streamline costs [11] - The closure of the Georgetown mill is expected to lead to a leaner and more productive North America business, with plans to support customers during the transition [12][14] - The company is committed to maintaining a strong financial position and returning cash to shareholders, with a focus on high-return capital projects [19][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future, citing strong cash generation and disciplined capital allocation [19][20] - The company anticipates a net positive impact on the industry from the Georgetown mill closure, despite a projected $40 million earnings impact [26][27] - Management is optimistic about the uncoated freesheet market conditions across regions and is preparing for upcoming opportunities [21][52] Other Important Information - A Brazilian Federal Regional Court ruled in favor of the company regarding a goodwill tax dispute, which may eliminate a $60 million escrow requirement [18] - The company is committed to returning at least 40% of its cash flow to shareholders this year [20] Q&A Session Summary Question: Impact of Georgetown closure on Riverdale agreement - Management is prepared for potential impacts and believes any negative effects can be mitigated through mix improvements [22] Question: Transition of retained business to existing footprint - All retained business has been successfully transitioned [23] Question: Net impact of Georgetown closure on earnings - The $40 million impact is based on 2024 margins, and other factors may mitigate this in 2025 [26][27] Question: Free cash flow estimate for Q4 - The estimated free cash flow of $65 million to $75 million is reasonable [30] Question: Planned maintenance costs in Europe for 2025 - Maintenance costs are expected to be in the $30 million to $40 million range due to outages at specific mills [32] Question: European Union Deforestation Regulation impact - The eventual implementation could positively affect the company as a European producer [36] Question: Capital allocation and share repurchases - The company maintains a strong balance sheet and is committed to returning cash to shareholders while evaluating share repurchases [38] Question: Demand and shipment outlook - Shipments are expected to be comparable to demand, despite slight declines in Europe and North America [49]

Financial Performance - Net income for Q3 2024 was $95 million ($2.27 per diluted share), an increase from $83 million ($1.98 per diluted share) in Q2 2024[1] - Net income for the three months ended September 30, 2024, was $95 million, compared to $58 million for the same period in 2023, representing a 63.8% increase[31] - Adjusted operating earnings for the nine months ended September 30, 2024, were $230 million, slightly up from $229 million in the same period of 2023[31] - The company reported a net income of $221 million for the nine months ended September 30, 2024, compared to $204 million in the same period last year, marking an increase of 8.34%[46] Sales and Revenue - Net sales for Q3 2024 reached $965 million, an increase from $933 million in Q2 2024 and $897 million in Q3 2023[9] - Net sales for the three months ended September 30, 2024, reached $965 million, an increase from $897 million in the same period of 2023, reflecting a 7.6% growth[33] - Total Net Sales for the three months ended September 30, 2024, reached $973 million, an increase of 7.39% from $906 million in the same period last year[42] - The company’s Latin America segment reported net sales of $247 million for the three months ended September 30, 2024, slightly up from $246 million in the same period of 2023[33] Cash Flow and Assets - Free cash flow for Q3 2024 was $119 million, up from $62 million in Q2 2024[1] - Free Cash Flow for the nine months ended September 30, 2024, was $148 million, compared to $190 million in the same period last year, reflecting a decrease of 22.11%[48] - Cash Provided by Operating Activities for the nine months ended September 30, 2024, was $305 million, down from $337 million in the same period last year[46] - Cash and temporary investments increased to $248 million as of September 30, 2024, compared to $220 million at the end of 2023[44] Profitability Metrics - Adjusted EBITDA for Q3 2024 was $193 million with a 20% margin, compared to $164 million with an 18% margin in Q2 2024[1] - The adjusted EBITDA margin for the three months ended September 30, 2024, was 20.0%, compared to 17.6% in the same period of 2023, indicating improved operational efficiency[41] - Total Business Segment Adjusted EBITDA for the three months ended September 30, 2024, was $193 million, up from $158 million in the same period last year, representing a 22.15% increase[42] - North America Adjusted EBITDA Margin improved to 21% for the three months ended September 30, 2024, compared to 19% in the previous quarter[42] Future Projections - Adjusted EBITDA for Q4 2024 is projected to be between $150 million and $165 million, with expected unfavorable price and mix impacts of $20 million to $25 million[2] - The company expects Adjusted EBITDA for the fourth quarter of 2024 to be between $150 million and $165 million, reflecting a positive outlook[49] Tax and Legal Matters - The effective tax rate for Q3 2024 was 28%, up from 27% in Q2 2024[14] - The company incurred a pre-tax loss of $5 million related to debt extinguishment costs for the three and nine months ended September 30, 2024[35] - The company reported a pre-tax loss of $2 million for legal fees related to the Brazil Tax Dispute for the three and nine months ended September 30, 2024[36] - For the nine months ended September 30, 2024, the company recognized a pre-tax gain of $1 million related to a foreign value-added tax refund in Brazil[25] Strategic Initiatives - Project Horizon aims to exceed $110 million in run rate savings by up to $10 million by the end of 2024[6] - The company announced a mutual termination of a supply agreement with International Paper, effective December 31, 2024, to optimize its North America region[3] Debt and Interest - The company’s total interest expense for the nine months ended September 30, 2024, was $32 million, compared to $28 million in the same period of 2023[41] Retained Earnings and Assets - Total Assets as of September 30, 2024, were $2,861 million, slightly down from $2,872 million as of December 31, 2023[44] - Retained Earnings increased to $2,393 million as of September 30, 2024, up from $2,222 million at the end of 2023, indicating a growth of 7.69%[44]

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades. Eve ...

Investors interested in Basic Materials stocks should always be looking to find the best-performing companies in the group. Is Sylvamo Corporation (SLVM) one of those stocks right now? Let's take a closer look at the stock's year-to-date performance to find out. Sylvamo Corporation is one of 236 companies in the Basic Materials group. The Basic Materials group currently sits at #15 within the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the ave ...

1 IF D H HT T 100 - 100 1 i T 1 Pgiam/iStock via Getty Images Investment Update Following my second buy rating on Sylvamo (NYSE:SLVM), the stock is +6% and provided ~400bps of alpha vs. the S&P 500 on a time-weighted basis. The overarching thesis on SLVM supporting its buy rating includes the following: Reasonable valuations where the risk/reward opportunity is asymmetrically skewed to the upside. At ~10x earnings / 1.9x EV/IC, market multiples 1) have a high propensity for expansion but 2) have less scope ...

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades. Whi ...

After reaching an important support level, Sylvamo Corporation (SLVM) could be a good stock pick from a technical perspective. SLVM surpassed resistance at the 20-day moving average, suggesting a short-term bullish trend. The 20-day simple moving average is a well-liked trading tool because it provides a look back at a stock's price over a 20-day period. Additionally, short-term traders find this SMA very beneficial, as it smooths out shortterm price trends and shows more trend reversal signals than longer- ...

After reaching an important support level, Sylvamo Corporation (SLVM) could be a good stock pick from a technical perspective. SLVM surpassed resistance at the 50-day moving average, suggesting a short-term bullish trend. The 50-day simple moving average is a widely used technical indicator that helps determine support or resistance levels for different types of securities. It's one of three major moving averages, but takes precedent because it's the first sign of an up or down trend. Shares of SLVM have be ...