Mercer International (MERC) AI Stock Analysis

• Market Cap: $135.97M
• Dividend Yield: 10.82%
• Average Volume (3M): 673.29K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.37
• 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: 989,613
• 30 Day Avg. Volume: 673,289
• 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: 10.71
• Enterprise Value/Revenue: 0.76
• Enterprise Value/Gross Profit: 17.06
• Enterprise Value/Ebitda: 11.72
• 1Y Price Target: $2.00
• Price Target Upside: 2.56% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): -3.63
• Revenue Forecast (FY): $1.88B

• Rating: 48 Neutral
• Price Target: $2.00 ▲(2.56% Upside)

Mercer International's overall stock score is primarily impacted by its financial performance, which is currently weak due to declining revenues and high leverage. The technical analysis suggests a bearish trend, and while the valuation offers a high dividend yield, the negative P/E ratio is concerning. The earnings call sentiment is negative, reflecting ongoing market challenges. The recent corporate event related to carbon capture is a positive development but has a limited immediate impact on the overall score.

Positive Factors

Sustainable Practices

The carbon capture pilot project reflects Mercer's commitment to sustainability, potentially positioning it as a leader in eco-friendly practices, which could enhance its reputation and long-term competitiveness in the industry.

Strategic Initiatives

The One Goal One Hundred initiative aims to improve profitability through cost savings and operational efficiencies, which could strengthen Mercer's financial position and competitiveness over the long term.

Mass Timber Business Growth

Growth in the mass timber business indicates a diversification of revenue streams, which could enhance Mercer's market position and resilience against industry-specific downturns.

Negative Factors

High Leverage

High leverage poses a financial risk, limiting Mercer's flexibility to invest in growth opportunities or weather economic downturns, potentially impacting its long-term stability.

Declining Revenue

Declining revenue growth suggests challenges in maintaining market share and pricing power, which could affect Mercer's ability to generate sustainable earnings over time.

Negative Profitability Margins

Negative profitability margins indicate operational inefficiencies and cost pressures, which could hinder Mercer's ability to achieve financial stability and invest in future growth.

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 facing financial challenges with declining revenues, negative profitability margins, and high leverage. While there are some improvements in cash flow growth, the company needs to address operational inefficiencies and manage its debt levels to stabilize its financial position.

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: Positive
• Last Price: 1.95
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MERC, the sentiment is Positive. The current price of 1.95 is above the 20-day moving average (MA) of 1.89, below the 50-day MA of 2.00, and below the 200-day MA of 3.42, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 55.38 is Neutral, neither overbought nor oversold. The STOCH value of 45.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	$1.93B	11.21	18.81%	3.51%	-8.92%	-32.30%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
MATV	58 Neutral	$685.15M	-1.53	-68.33%	3.19%	0.39%	-505.56%
MERC	48 Neutral	$135.97M	-0.81	-39.37%	10.82%	-5.85%	9.13%
CLW	46 Neutral	$287.73M	-1.80	-10.47%	―	-21.76%	-1214.73%

Mercer International Corporate Events

Mercer International launches carbon capture pilot at pulp mill

On December 18, 2025, Mercer International announced that its subsidiary Mercer Peace River Pulp Ltd. and Svante Technologies Inc. have begun operating a carbon dioxide capture demonstration unit at the Mercer Peace River pulp mill in northern Alberta, marking the start of a six‑month pilot project to test Svante’s solid sorbent technology on biogenic CO₂ emissions from the mill’s recovery boiler flue gas. The demonstration follows completion of a front‑end engineering and design phase and is intended to generate technical and operational data to guide the next engineering stages, assess the decarbonization potential for Mercer’s pulp operations and evaluate the broader commercial viability of carbon capture in the pulp and paper industry, with any further project scale‑up contingent on the pilot results and other economic, technical and commercial factors.