Mercer International (MERC) AI Stock Analysis

• Market Cap: $117.89M
• Dividend Yield: 12.78%
• Average Volume (3M): 584.43K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.43
• Revenue Growth: -5.85%
• EPS Growth: 9.13%
• Country: US
• Employees: 3,580
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -1.21
• Shares Outstanding: 66,982,506
• 10 Day Avg. Volume: 403,644
• 30 Day Avg. Volume: 584,435
• PEG Ratio: 0.08
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 0.21
• P/FCF Ratio: 73.79
• Enterprise Value/Market Cap: 14.12
• Enterprise Value/Revenue: 0.87
• Enterprise Value/Gross Profit: 19.51
• Enterprise Value/Ebitda: 13.40
• 1Y Price Target: $2.00
• Price Target Upside: 2.56% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): -3.3
• Revenue Forecast (FY): $1.89B

• Rating: 45 Neutral
• Price Target: $1.50 ▼(-23.08% Downside)

Mercer International's overall stock score is primarily impacted by its weak financial performance and bearish technical indicators. The high dividend yield provides some valuation support, but the negative earnings and market conditions pose significant risks. The company's strategic initiatives may offer long-term potential, but current challenges weigh heavily on the stock.

Positive Factors

Strategic Initiatives

The One Goal One Hundred initiative targets $100 million in cost savings by 2026, enhancing operational efficiency and profitability.

Mass Timber Business Growth

Growth in the mass timber business indicates diversification and potential revenue expansion, supporting long-term business sustainability.

Liquidity Position

A strong liquidity position provides financial flexibility to manage debt and invest in growth opportunities, enhancing resilience against market volatility.

Negative Factors

High Leverage

High leverage increases financial risk, limiting the company's ability to invest in growth and potentially impacting long-term financial stability.

Negative Profit Margins

Negative profit margins indicate operational inefficiencies and pricing challenges, which can hinder the company's ability to generate sustainable profits.

Decreased Pulp and Lumber Prices

Falling pulp and lumber prices reduce revenue potential and profit margins, challenging the company's ability to maintain financial health.

Mercer International Business Overview & Revenue Model

Company Description

Mercer International Inc. (MERC) is a leading global producer of wood-based products, primarily engaged in the manufacturing of pulp and paper products. The company operates in the forest products sector, focusing on the production of market pulp, lumber, and renewable energy. With facilities located in Canada and Germany, Mercer International emphasizes sustainable forestry practices to ensure the responsible sourcing of wood fiber, contributing to its commitment to environmental stewardship.

How the Company Makes Money

Mercer International generates revenue primarily through the sale of its wood-based products, including market pulp, which is used in the production of paper and other products. The company benefits from a diversified revenue model, with significant income derived from both domestic and international markets. Key revenue streams include sales from its pulp mills, lumber production, and energy generation from biomass. Additionally, Mercer engages in strategic partnerships and long-term contracts with industrial customers, securing stable demand for its products. Factors contributing to its earnings include fluctuations in global pulp prices, demand for wood products, and operational efficiencies achieved through advanced manufacturing processes.

Mercer International Financial Statement Overview

Summary

Mercer International is experiencing financial difficulties with declining revenues, negative profitability margins, and high leverage. Although there are improvements in cash flow growth, the company faces significant operational inefficiencies and debt management challenges.

Income Statement

Mercer International's income statement shows a challenging period with declining revenue growth and negative net profit margins in the TTM. The gross profit margin has significantly decreased from previous years, indicating cost pressures or pricing challenges. The EBIT and EBITDA margins are also negative, reflecting operational inefficiencies or market conditions impacting profitability.

Balance Sheet

The balance sheet reveals high leverage with a debt-to-equity ratio exceeding 4 in the TTM, which poses financial risk. The return on equity is negative, indicating losses relative to shareholder equity. However, the equity ratio remains stable, suggesting a reasonable proportion of equity financing relative to total assets.

Cash Flow

Cash flow analysis highlights negative free cash flow in the TTM, although there is a notable improvement in free cash flow growth. The operating cash flow to net income ratio is low, indicating challenges in converting income into cash. The free cash flow to net income ratio is negative, reflecting cash flow difficulties.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.91B	2.04B	1.99B	2.28B	1.80B	1.42B
Gross Profit	85.31M	189.36M	-31.86M	498.20M	425.52M	130.60M
EBITDA	124.23M	15.01M	-9.07M	560.96M	478.78M	192.65M
Net Income	-172.48M	-85.14M	-242.06M	247.04M	170.99M	-17.23M
Balance Sheet
Total Assets	2.29B	2.26B	2.66B	2.73B	2.35B	2.13B
Cash, Cash Equivalents and Short-Term Investments	98.10M	184.93M	313.99M	354.03M	345.61M	361.10M
Total Debt	1.57B	1.49B	1.63B	1.37B	1.26B	1.21B
Total Liabilities	1.93B	1.83B	2.03B	1.89B	1.66B	1.53B
Stockholders Equity	359.53M	429.77M	635.41M	838.78M	694.02M	601.03M
Cash Flow
Free Cash Flow	-61.55M	5.89M	-205.33M	181.92M	21.39M	-37.60M
Operating Cash Flow	33.59M	90.20M	-69.00M	360.66M	182.21M	41.56M
Investing Cash Flow	-76.70M	-66.99M	-199.87M	-424.61M	-187.13M	-59.83M
Financing Cash Flow	-92.12M	-152.78M	228.62M	80.90M	-9.50M	26.32M

Mercer International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MERC, the sentiment is Negative. The current price of 1.95 is above the 20-day moving average (MA) of 1.73, below the 50-day MA of 2.27, and below the 200-day MA of 3.81, indicating a neutral trend. The MACD of -0.16 indicates Negative momentum. The RSI at 41.72 is Neutral, neither overbought nor oversold. The STOCH value of 85.35 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MERC.

Mercer International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SLVM	69 Neutral	$1.89B	10.97	18.81%	3.76%	-8.92%	-32.30%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
MATV	58 Neutral	$682.97M	―	-68.33%	3.25%	0.39%	-505.56%
CLW	48 Neutral	$291.74M	―	-10.47%	―	-21.76%	-1214.73%
MERC	45 Neutral	$117.89M	―	-39.37%	12.78%	-5.85%	9.13%

Mercer International Corporate Events

Mercer International’s Earnings Call: Challenges and Initiatives

Mercer International Faces Financial Challenges Amid Market Pressures

Mercer International Faces Challenges Amid Market Uncertainties

Mercer International Inc. is a global forest products company operating in Germany, the USA, and Canada, specializing in pulp, lumber, and biofuels production. In its third-quarter 2025 earnings report, Mercer International revealed a challenging period marked by a significant operating EBITDA loss of $28.1 million and a net loss of $80.8 million, largely due to a non-cash inventory impairment and adverse market conditions. The company faced industry-wide challenges, including higher fiber costs and a decline in pulp market demand and pricing, which were exacerbated by global economic uncertainties and trade issues. Despite these setbacks, Mercer International continues to focus on its ‘One Goal One Hundred’ program, aiming for $100 million in cost savings and operational efficiencies by the end of 2026. Looking forward, Mercer International remains committed to improving liquidity and operational efficiency, with plans to reduce costs and capital expenditures while exploring strategic projects like carbon capture to enhance long-term sustainability.

Mercer International Faces Economic Challenges in Q3 2025, Advances Sustainability Initiatives

Mercer International Inc. reported a challenging third quarter in 2025, with an Operating EBITDA of negative $28.1 million and a net loss of $80.8 million. The company faced significant hurdles due to global economic uncertainties, higher fiber costs, and pulp substitution, leading to a non-cash inventory impairment. Despite these challenges, Mercer is advancing its ‘One Goal One Hundred’ program aimed at achieving $100 million in cost savings by the end of 2026. Additionally, Mercer is progressing with a carbon capture project at its Peace River mill, which is expected to enhance the mill’s long-term economic viability and sustainability. The company anticipates continued weak pulp prices in the fourth quarter, while lumber prices are expected to increase modestly in Europe and the U.S. due to tariffs and higher fiber costs.

The most recent analyst rating on (MERC) stock is a Hold with a $2.50 price target. To see the full list of analyst forecasts on Mercer International stock, see the MERC Stock Forecast page.