Core Viewpoint - Sylvamo (NYSE: SLVM) stock has increased by 21% following a second buy rating, and it currently trades at less than 10 times forward EBIT, which is considered surprising for the company [1]. Group 1 - The stock's performance indicates strong market interest and potential undervaluation [1]. - The company is positioned within a complex financial market landscape, involving various market participants such as speculators and long-term traders [1]. - The analysis suggests that there are significant value drivers and capital flows influencing the stock's price action [1]. Group 2 - The analyst holds a beneficial long position in SLVM shares, indicating confidence in the company's future performance [2]. - The article reflects the analyst's personal opinions and is not influenced by external compensation [2]. - There is no business relationship between the analyst and the company mentioned, ensuring an objective viewpoint [2].

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]

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- ...

Second Quarter 2024 Earnings August 9, 2024 1 © 2024 Sylvamo Corporation. All rights reserved. The World's Paper Company Cautionary statement concerning forward-looking statements 2 This presentation contains information that includes or is based upon forward-looking statements. Forward-looking statements forecast or state expectations concerning future events. These statements often can be identified by the fact that they do not relate strictly to historical or current facts. They typically use words such ...

Financial Performance - Net income for Q2 2024 was $83 million ($1.98 per diluted share), up from $43 million ($1.02 per diluted share) in Q1 2024[73]. - Net sales increased to $933 million in Q2 2024 from $905 million in Q1 2024, with adjusted EBITDA rising to $164 million and an adjusted EBITDA margin of 18%[73][92]. - Adjusted EBITDA for the first half of 2024 was $282 million, down from $332 million in the same period of 2023[92]. - Cash provided by operating activities for the six months ended June 30, 2024, was $142 million, an increase from $140 million for the same period in 2023[97]. - Free Cash Flow for the six months ended June 30, 2024, was $29 million, compared to $35 million for the same period in 2023[94]. - The company generated strong operating cash flow, indicating confidence in meeting short-term liquidity needs[95]. Segment Performance - Business segment operating profit for North America increased by $32 million year-over-year in Q2 2024, driven by higher volumes and lower costs[89]. - Latin America segment reported a decrease in operating profit by $11 million in Q2 2024, primarily due to lower sales prices and unfavorable product mix[86]. - Europe segment's operating profit increased by $19 million year-over-year in Q2 2024, attributed to lower outage costs and input costs[83]. Cash Flow and Expenditures - Free cash flow improved to $62 million in Q2 2024 compared to $(33) million in Q1 2024[73]. - Cash used for working capital components decreased to $72 million for the six months ended June 30, 2024, from $94 million in the same period of 2023[98]. - Total capital expenditures for the six months ended June 30, 2024, were approximately $113 million, or 6.1% of net sales[102]. - The company expects to spend approximately $175 to $190 million annually on maintenance, regulatory, and reforestation capital expenditures for the next several years[102]. - Cash used for financing activities for the six months ended June 30, 2024, included $25 million in dividends and $30 million in share repurchases[100]. - Cash used for investing activities decreased primarily due to the prior year's purchase of the Nymölla mill[99]. - The company plans to spend approximately $30 million to $35 million on high-return projects in 2024[102]. Future Outlook - The company expects slightly unfavorable price and mix in Q3 2024, but volume is anticipated to improve, particularly in Latin America and North America[75]. - Planned maintenance outage costs are expected to improve significantly in Q3 2024, with no major planned outages scheduled[75]. - The company has completed almost 75% of its planned maintenance outages for the year after the first half[74]. Accounting Policies - The company has not made any changes to its critical accounting policies during the first six months of 2024[105].

Financial Performance - Net income for Q2 2024 was $83 million ($1.98 per diluted share), compared to $43 million ($1.02 per diluted share) in Q1 2024[2]. - Adjusted EBITDA increased to $164 million (18% margin) in Q2 2024, up from $118 million (13% margin) in Q1 2024[2]. - Free cash flow improved to $62 million in Q2 2024, compared to a negative $33 million in Q1 2024[2]. - Net sales for Q2 2024 were $933 million, an increase from $905 million in Q1 2024[8]. - Net income for the three months ended June 30, 2024, was $83 million, compared to $49 million for the same period in 2023, representing a 69.4% increase[21]. - Adjusted EBITDA for the three months ended June 30, 2024, was $164 million, up from $124 million in the same period last year, reflecting a 32.3% increase[29]. - Net sales for the three months ended June 30, 2024, totaled $933 million, compared to $919 million for the same period in 2023, indicating a 1.5% growth[23]. - The adjusted EBITDA margin for the three months ended June 30, 2024, was 17.6%, compared to 13.5% in the same period last year, showing an improvement of 4.1 percentage points[29]. - Operating profit by business segment for Q2 2024 was $122 million, up from $72 million in Q1 2024[9]. - Operating profit for North America in the three months ended June 30, 2024, was $77 million, compared to $45 million in the same period last year, a 71.1% increase[24]. - Net income for the six months ended June 30, 2024, was $126 million, down from $146 million for the same period in 2023, reflecting a decrease of 13.7%[34]. - Free cash flow for the six months ended June 30, 2024, was $29 million, compared to $35 million in 2023, indicating a decrease of 17.1%[36]. Future Projections - The company expects adjusted EBITDA for Q3 2024 to be between $170 million and $185 million, with volume projected to increase by $10 million to $15 million[1]. - Adjusted EBITDA for the three months ending September 30, 2024, is estimated to be between $170 million and $185 million[37]. Shareholder Returns - A 50% dividend increase was declared for Q3 2024, raising the dividend from $0.30 to $0.45 per share[5]. - The company repurchased $30 million of its shares this year, with $120 million remaining on its $150 million share repurchase authorization[5]. Cost Management - Project Horizon aims for run rate savings of $110 million by the end of 2024 through structural cost reductions[6]. Tax and Expenses - The effective tax rate for Q2 2024 was 27%, unchanged from the previous quarter[11]. - Interest expense for the three months ended June 30, 2024, was $9 million, down from $12 million in the same period last year[29]. - The company incurred a pre-tax loss of $2 million for integration costs related to the Nymölla acquisition during the three months ended March 31, 2024[19]. - The company reported a pre-tax gain of $1 million for a foreign value-added tax refund in Brazil for the three months ended June 30, 2024[25]. Asset and Liability Management - Total assets decreased from $2,872 million on December 31, 2023, to $2,691 million on June 30, 2024, representing a decline of approximately 6.3%[32]. - Cash and temporary investments decreased from $220 million to $145 million, a reduction of 34.1%[32]. - Total current liabilities decreased from $695 million to $654 million, a decline of approximately 5.9%[32]. - Long-term debt decreased from $931 million to $894 million, a reduction of 4.0%[32]. - Total equity decreased from $901 million to $830 million, a decline of approximately 7.9%[32]. - Retained earnings increased from $2,222 million to $2,317 million, an increase of 4.3%[32].