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Clearwater Paper Corp. (CLW)
NYSE:CLW
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Clearwater Paper
(NYSE:CLW)
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Rating:44Neutral
Price Target:
$16.50
▲(15.95% Upside)
Action:ReiteratedDate:02/19/26
The score is held down primarily by weakened financial performance (recent losses and negative free cash flow) and bearish technical signals (below key moving averages with negative MACD). The latest earnings call provides some offset via demonstrated cost control, strong liquidity, and operational improvements, but near-term guidance still points to significant pricing and market headwinds; valuation support is limited due to negative earnings and no provided dividend yield.
Positive Factors
Portfolio focus & integration
Completing the Augusta Mill integration and running a paperboard-focused portfolio creates durable scale and operational focus. This consolidation supports higher shipments, tighter operational control and better asset utilization, improving long-term margin and competitive positioning in packaging grades.
Sustained cost discipline
Material fixed-cost and SG&A reductions are structural levers that raise the margin floor and improve operating leverage. Persisting lower overhead (6.5% of sales) enhances resilience in an oversupplied market, enabling the company to defend share and retain cash generation as volumes and prices fluctuate.
Balance sheet liquidity & manageable leverage
A manageable capital structure and solid equity base provide financial flexibility to fund planned capex, potential downtime decisions, and working-capital needs. Combined with stated liquidity sources, this reduces near-term refinancing risk and supports strategic moves like targeted conversions or product launches.
Negative Factors
Weak cash generation
Consecutive years of negative free cash flow materially constrain the firm's ability to fund capex, deleverage or return capital without external financing. Persistently weak cash generation increases balance-sheet sensitivity and limits execution of growth initiatives or extended downtime to rebalance supply.
Industry oversupply & pricing pressure
A multi-hundred-thousand-ton structural oversupply depresses pricing across grades and can sustain margin pressure for multiple quarters. Such industry excess limits pricing power, forces utilization cuts or downtime, and undermines a return to normalized cross-cycle margins without significant demand or import changes.
Profitability deterioration & impairment
A goodwill impairment reflects long-term earnings shortfalls versus prior expectations and weakens return metrics and equity cushions. This indicates durable profitability deterioration that could limit capital allocation flexibility and signal the need for sustained structural improvements to restore returns.
Clearwater Paper (CLW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$230.63M
Dividend YieldN/A
Average Volume (3M)177.34K
Price to Earnings (P/E)―
Beta (1Y)0.87
Revenue Growth-21.76%
EPS Growth-1214.73%
CountryUS
Employees2,200
SectorBasic Materials
Sector Strength58
IndustryPaper, Lumber & Forest Products
Share Statistics
EPS (TTM)-0.42
Shares Outstanding16,038,485
10 Day Avg. Volume205,308
30 Day Avg. Volume177,342
Financial Highlights & Ratios
PEG Ratio0.13
Price to Book (P/B)0.34
Price to Sales (P/S)0.18
P/FCF Ratio-3.66K
Enterprise Value/Market Cap2.82
Enterprise Value/Revenue0.42
Enterprise Value/Gross Profit5.62
Enterprise Value/Ebitda13.95
Forecast
1Y Price Target
$19.67Price Target Upside38.23% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)-1.72
Revenue Forecast (FY)$1.51B
Clearwater Paper Business Overview & Revenue Model
Company DescriptionClearwater Paper Corporation manufactures and supplies bleached paperboards, and consumer and parent roll tissues in the United States and internationally. It operates through two segments, Pulp and Paperboard, and Consumer Products. The Pulp and Paperboard segment offers folding cartons, liquid packaging, cups and plates, blister and carded packaging products, top sheet and commercial printing items, and softwood pulp products, as well as custom sheeting, slitting, and cutting of paperboard products. It sells its products to packaging converters, folding carton converters, merchants, and commercial printers. The Consumer Products segment provides a line of at-home tissue products, including bath tissues, paper towels, facial tissues, and napkins; recycled fiber value grade products; and away-from-home tissues. This segment sells its products to retailers and wholesale distributors, including grocery, club, mass merchants, and discount stores. Clearwater Paper Corporation was incorporated in 2005 and is headquartered in Spokane, Washington.
How the Company Makes MoneyClearwater Paper generates revenue primarily through the sale of its consumer products and pulp and paperboard products. The Consumer Products segment contributes significantly to its earnings, with revenue derived from the sale of tissue products under private label brands to major retailers. The Pulp and Paperboard segment generates income from the sale of bleached paperboard used in packaging applications, serving a diverse range of industries. Additionally, Clearwater Paper benefits from economies of scale in production and distribution, which helps to enhance its profitability. Strategic partnerships with retailers and distributors further augment its market reach, while the company's commitment to sustainability and efficient manufacturing practices play a crucial role in maintaining competitive pricing and driving revenue growth.
Clearwater Paper Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Neutral
The call presented a balanced picture: Clearwater Paper delivered strong operational execution in 2025—notably a 12% sales increase, 14% shipment growth, a $107M adjusted EBITDA (up $71M), >$50M in fixed cost reductions, lower SG&A (6.5% of sales) and maintained >$400M liquidity—while also outlining substantial near-term market challenges. Key headwinds include a large industry supply overhang (500k+ tons added), an estimated ~$70M pricing headwind for 2026, a full-year net loss driven by a goodwill impairment, and Q1 operational/weather-related costs of $15–20M. Management emphasized cost discipline, potential price increases, product diversification (VOLURA, possible CUK conversion) and willingness to take downtime to rebalance supply, but retained caution on demand recovery and near-term profitability.Q4-2025 Updates
Positive Updates
Successful Transformation and Integration
Completed first full year operating as a paperboard-focused business; successfully integrated the Augusta Mill and completed separation of the tissue business ahead of schedule, enabling higher shipments and portfolio focus.
Net Sales Growth
Full-year net sales of $1,600,000,000, an increase of 12% year-over-year driven primarily by operating the Augusta Mill for a full year.
Shipment Increase
Shipments increased approximately 14% year-over-year, primarily attributable to the Augusta Mill contribution.
Adjusted EBITDA Improvement
Adjusted EBITDA from continuing operations was $107,000,000 for the full year, up $71,000,000 versus prior year (an increase of ~197% versus the prior-year base of ~$36M), driven by cost control, higher volumes and lower input costs.
Material Fixed Cost and SG&A Reductions
Delivered more than $50,000,000 in fixed cost reductions including $16,000,000 in SG&A savings; SG&A declined to 6.5% of net sales from 8.4% in 2024 (a ~1.9 percentage-point improvement).
Improved Outage Execution and Lower Maintenance Spend
Completed all three major maintenance outages on schedule with total direct costs of $50,000,000 for the year, significantly lower than 2024 due to improved planning and execution.
Strong Liquidity and Balance Sheet
Ended the year with more than $400,000,000 in liquidity, supporting options to maintain flexibility (including refinancing 2020 notes due August 2027).
Insurance Recovery and Q4 Results
Received initial representation & warranty insurance settlement of $23,000,000 (with $6,000,000 related to 2025 operating costs) and Q4 net income from continuing operations of $3,000,000 ($0.20 per diluted share). Q4 adjusted EBITDA from continuing operations was $20,000,000, above the guidance midpoint.
Product & Growth Initiatives
Preparing to launch VOLURA lightweight paperboard in Q2 and completed engineering feasibility for a potential CUK conversion at Cypress Bend (estimated $60,000,000 capex, 12–18 month timeline) targeting 100,000–150,000 tons capture; continuing evaluation of CRB additions.
Capital Allocation Discipline
Repurchased $17,000,000 of shares in 2025 and retains $79,000,000 remaining under authorization; 2026 planned capex $65,000,000–$75,000,000 and expected working capital improvement of ~$20,000,000.
Negative Updates
Industry Supply/Demand Imbalance
Industry added >500,000 tons of new capacity in 2025 (~10% increase), pushing operating rates down to the low-80% range and creating significant pricing and margin pressure; company estimates supply exceeds demand by ~400,000–500,000 tons.
Significant Pricing Headwind
Facing an approximately $70,000,000 pricing headwind in 2026 versus 2025 (includes a $50,000,000 headwind from recent RISI movements); RISI reported a $100/ton Q4 SBS decline while the company saw an average ~$21/ton Q3-to-Q4 decline.
Full-Year Net Loss Driven by Goodwill Impairment
Reported full-year net loss from continuing operations of $53,000,000, or $3.28 per diluted share, primarily due to a non-cash goodwill impairment.
Near-Term Profitability Pressure and Q1 Guidance
Expect first-quarter adjusted EBITDA of approximately breakeven; 2026 revenue guidance of $1,400,000,000–$1,500,000,000 (down from $1.6B in 2025) with flat to modest shipment growth and a ~ $70M carryover pricing headwind; guidance excludes potential benefit from recent price increases or RISI recovery.
Severe Weather Operational Impacts
Operational disruptions at Odessa and Cypress Bend from severe weather in January/February resulted in approximately $15,000,000–$20,000,000 of incremental costs and lower production in Q1.
Potential for Extended Curtailments
Management indicated potential for extended market-related downtime or other supply-balancing actions if conditions do not improve; no concrete long-term curtailment decisions announced, creating execution uncertainty.
Market Pricing Distortions and Substitution Risk
SBS is priced lower per ton than CUK and lower per square foot than CRB despite higher manufacturing costs, creating arbitrage and possible grade substitution (CRB→SBS) that could further pressure returns.
Workforce Reductions
Company reduced overall workforce by more than 10% in 2025, including ~40% reduction in corporate SG&A headcount—necessary for cost savings but a sign of material restructuring and potential execution risks.
Limited Near-Term Shareholder Returns
Share repurchases were modest ($17,000,000) and management indicates buybacks will be considered only when there is clearer visibility to positive free cash flow, limiting immediate capital returns.
Company Guidance
The company’s 2026 guidance calls for revenue of $1.4–$1.5 billion with flat-to-modest shipment growth, assumes a roughly $70 million pricing headwind carried from 2025, expects net productivity to offset 2–3% of input cost inflation, plans capital expenditures of $65–$75 million, targets a ~$20 million working capital improvement (back‑half weighted) and SG&A of 6–7% of sales, and expects first‑quarter adjusted EBITDA to be approximately breakeven after $15–$20 million of weather‑related incremental costs (Q1 shipments flat to slightly lower, Q1 pricing down $10–$12 million from Q4 RISI moves, and Q1 maintenance expense $11–$13 million lower versus Q4 with no major outages). For context, management has implemented price increases of $60/ton for cup grades and $50/ton for other non‑RISI‑tied volume (~50% of volume), cites RISI’s forecast of SBS operating rates rising to ~90% with +$60/ton in 2026 (+$130/ton by 2027), and expects to return to cross‑cycle EBITDA margins of 13–14% and >$100 million of annual free cash flow long term; FY2025 results included adjusted EBITDA of $107 million, net sales of $1.6 billion (+12% y/y), Q4 adjusted EBITDA of $20 million, total 2025 outage spending of $50 million (Augusta Q4 outage $17 million), >$50 million of fixed cost reductions (incl. $16 million SG&A), SG&A at 6.5% of sales (down from 8.4%), liquidity >$400 million, $17 million in repurchases with $79 million remaining authorization, and an initial $23 million insurance settlement (of a $105 million limit) with ~$75 million of coverage remaining.Clearwater Paper Financial Statement Overview
Summary
Income statement and cash flow are the main drags: profitability deteriorated into losses in 2024–2025 with severe margin pressure and volatile revenue, and free cash flow turned negative and worsened further. The balance sheet is a relative stabilizer with manageable leverage and solid liquidity, but negative ROE signals ongoing stress if the downturn persists.Income Statement
Profitability has deteriorated meaningfully: the company moved from solid profits in 2022–2023 (positive net margin, with 2023 notably stronger) to losses in 2024 and 2025, with 2025 showing negative operating results and a very weak gross margin. Revenue has also been volatile—down sharply in 2023, rebounding in 2024, and then collapsing in 2025—making earnings quality and forward visibility weaker despite prior-period strength.34
Negative
Balance Sheet
Leverage looks manageable on the latest annual balance sheet, with debt modest relative to equity and a still-solid equity base versus total assets. However, returns on equity turned negative in 2024–2025, signaling that the capital structure is being stressed by operating losses, and leverage was materially higher in earlier years, highlighting cyclicality and potential balance-sheet sensitivity if profits do not recover.58
Neutral
Cash Flow
Cash generation weakened substantially: free cash flow turned negative in 2024 and deteriorated further in 2025, and operating cash flow in 2025 is very low relative to the year’s net loss (limited cash support). This contrasts with 2020–2023, when operating cash flow and free cash flow were consistently positive, suggesting the current downturn is pressuring liquidity and reinvestment capacity.29
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.56B | 1.38B | 1.14B | 2.08B | 1.77B |
| Gross Profit | 115.60M | 76.10M | 200.70M | 256.70M | 182.60M |
| EBITDA | 111.50M | -900.00K | 117.80M | 212.00M | 104.50M |
| Net Income | -20.10M | -110.90M | 107.70M | 46.00M | -28.10M |
Balance Sheet | |||||
| Total Assets | 1.59M | 1.68B | 1.67B | 1.70B | 1.69B |
| Cash, Cash Equivalents and Short-Term Investments | 30.70K | 79.60M | 42.00M | 54.40M | 25.20M |
| Total Debt | 421.80M | 321.60M | 472.60M | 613.70M | 698.00M |
| Total Liabilities | 763.00K | 824.80M | 1.00B | 1.13B | 1.18B |
| Stockholders Equity | 825.30M | 854.50M | 668.70M | 572.00M | 511.70M |
Cash Flow | |||||
| Free Cash Flow | -76.50K | -55.20M | 117.00M | 116.70M | 58.00M |
| Operating Cash Flow | 12.30K | 61.40M | 190.70M | 150.20M | 96.40M |
| Investing Cash Flow | -100.40K | 167.70M | -73.70M | -33.50M | -25.10M |
| Financing Cash Flow | 39.30K | -191.40M | -129.40M | -88.60M | -82.00M |
Clearwater Paper Technical Analysis
Negative
14.23
Price Trends
17.81
Negative
18.16
Negative
21.90
Negative
Market Momentum
-0.93
Positive
29.42
Positive
7.15
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CLW, the sentiment is Negative. The current price of 14.23 is below the 20-day moving average (MA) of 16.69, below the 50-day MA of 17.81, and below the 200-day MA of 21.90, indicating a bearish trend. The MACD of -0.93 indicates Positive momentum. The RSI at 29.42 is Positive, neither overbought nor oversold. The STOCH value of 7.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CLW.
Clearwater Paper Risk Analysis
Clearwater Paper disclosed 41 risk factors in its most recent earnings report. Clearwater Paper reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Clearwater Paper Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
56 Neutral | $1.83B | 14.26 | 14.56% | 3.51% | -8.92% | -32.30% | |
52 Neutral | $592.20M | -1.76 | -49.79% | 3.26% | 0.39% | -505.56% | |
44 Neutral | $230.63M | -11.34 | -10.47% | ― | -21.76% | -1214.73% | |
44 Neutral | $126.60M | -0.25 | -39.37% | 10.77% | -5.85% | 9.13% |
* Basic Materials Sector Average
CLW
Clearwater Paper
14.23
-12.85
-47.45%
MERC
Mercer International
1.87
-5.95
-76.09%
MATV
Mativ Holdings
11.02
4.39
66.19%
SLVM
Sylvamo Corp
45.81
-22.01
-32.45%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.