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Sylvamo Corp (SLVM)
NYSE:SLVM
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Sylvamo Corp
(NYSE:SLVM)
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Rating:56Neutral
Price Target:
$53.00
▲(8.83% Upside)
Action:ReiteratedDate:02/17/26
The score is held back primarily by weakening 2025 profitability/cash flow and a cautious 2026 setup with sizable transition-year EBITDA/cash headwinds and elevated capex. Offsetting that, the balance sheet is more resilient than prior years, technicals are moderately supportive with price above key moving averages, and valuation is reasonable with a mid-teens P/E and ~3.5% yield.
Positive Factors
Improved balance sheet and manageable leverage
Debt reduction and equity expansion since 2021 have meaningfully lowered balance-sheet risk for this cyclical paper business. Manageable leverage (net debt/EBITDA ~1.6x) preserves flexibility to fund capex and withstand downturns, supporting durable credit and investment capacity.
High-return strategic investments (Eastover) to lift capacity and efficiency
Targeted, high-return projects (Eastover sheeter, machine optimization, woodyard upgrades) increase uncoated freesheet capacity and lower unit costs. When ramped these investments underlie management’s >$300M annual FCF and >15% ROIC thesis, improving long-term cash generation.
Strong brands and diversified distribution across regions
Well-known consumer and commercial brands plus direct and distributor channels support steadier demand and pricing versus pure commodity peers. Brand/license positions and multi-region sales diversify revenue and reduce single-market exposure over business cycles.
Negative Factors
Material 2026 transition-year EBITDA and cash headwinds
Substantial one-time charges, elevated capex and a planned outage create near-term cash and EBITDA pressure, constraining free cash flow and limiting buybacks/dividends optionality. This transition reduces financial flexibility and raises execution risk until benefits materialize.
Prolonged European pricing weakness and input-cost pressure
Sustained lower realizations in Europe and rising wood costs (lagged 3–6 months) compress margins and can persist across quarters. Geographic cost mismatches and freight/tariff drags impair profitability until pricing recovers or structural cost reductions are realized.
Weaker and volatile cash generation with recent revenue and earnings decline
Year‑over‑year swings in OCF and a sharp 2025 earnings downshift highlight cyclicality and limit margin for error during investment-heavy years. Volatile cash conversion reduces runway for discretionary returns and heightens sensitivity to slower demand or further cost shocks.
Sylvamo Corp (SLVM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.88B
Dividend Yield3.51%
Average Volume (3M)297.49K
Price to Earnings (P/E)14.8
Beta (1Y)1.06
Revenue Growth-8.92%
EPS Growth-32.30%
CountryUS
Employees6,500
SectorBasic Materials
Sector Strength58
IndustryPaper, Lumber & Forest Products
Share Statistics
EPS (TTM)1.08
Shares Outstanding39,438,255
10 Day Avg. Volume401,789
30 Day Avg. Volume297,492
Financial Highlights & Ratios
PEG Ratio-0.26
Price to Book (P/B)2.00
Price to Sales (P/S)0.58
P/FCF Ratio7.21
Enterprise Value/Market Cap1.40
Enterprise Value/Revenue0.79
Enterprise Value/Gross Profit3.64
Enterprise Value/Ebitda5.96
Forecast
1Y Price Target
$55.00Price Target Upside12.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)4.39
Revenue Forecast (FY)$3.27B
Sylvamo Corp Business Overview & Revenue Model
Company DescriptionSylvamo Corporation produces and supplies printing paper in Latin America, Europe, and North America. The company offers uncoated freesheet for paper products, such as cutsize and offset paper; and markets pulp, aseptic, and liquid packaging board, as well as coated unbleached kraft papers. It also produces hardwood pulp, including bleached hardwood kraft and bleached eucalyptus kraft; bleached softwood kraft; and bleached chemi-thermomechanical pulp. The company distributes its products through a variety of channels, including merchants and distributors, office product suppliers, e-commerce, retailers, and dealers. It also sells directly to converters that produce envelopes, forms, and other related products. The company was founded in 1898 and is headquartered in Memphis, Tennessee.
How the Company Makes MoneySylvamo Corp generates revenue primarily through the sale of uncoated freesheet paper products to various industries, including commercial printing and publishing. The company's revenue model is based on a combination of direct sales to customers and distribution through partnerships with wholesalers and retailers. Key revenue streams include bulk orders from large printing companies and specialty paper products tailored for specific applications. Additionally, Sylvamo benefits from cost management strategies and operational efficiencies, which enhance its profitability. The company also focuses on sustainable practices, which can appeal to environmentally conscious customers and potentially lead to increased market share.
Sylvamo Corp Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 08, 2026
Earnings Call Sentiment Neutral
The call presents a balanced picture: the company has a strong balance sheet, clear strategic investments (notably Eastover) and demonstrated operational execution and historical cash-generation track record, which are positive for long-term value creation. However, near-term headwinds are significant—European pricing and wood-cost pressures, a meaningful North America transition with roughly $85–95 million of largely one-time 2026 EBITDA and cash impacts, elevated 2026 capex, and modest 2025 free cash flow—creating short-term earnings and cash volatility. Management frames 2026 as a transition year with substantial one-time costs and expects improvements as projects ramp and markets recover.Q4-2025 Updates
Positive Updates
Full-Year Financial Strength and Returns
Fiscal 2025 adjusted EBITDA of $448,000,000 (13% margin); free cash flow of $44,000,000; adjusted operating earnings of $3.54 per share; 12% return on capital; net debt to adjusted EBITDA of 1.6x. Returned $155,000,000 in cash to shareholders and reinvested $224,000,000 into manufacturing and Brazil forest lands.
Fourth Quarter Operating and Commercial Momentum
Q4 adjusted EBITDA of $125,000,000 (14% margin), free cash flow of $38,000,000, and adjusted operating earnings of $1.08 per share. Uncoated freesheet sales volume increased 9% quarter-over-quarter and paper machine productivity continued to improve.
Substantial High-Return Investment Program
2026 capital spending outlook of $245,000,000 with ~$145,000,000 at the Eastover mill to fund projects that are expected to add 60,000 tons of uncoated freesheet, reduce costs and improve mix/efficiency. Management expects 2027 capex to decline and projects long-term potential of >$300,000,000 annual free cash flow and >15% returns on invested capital once benefits materialize.
Operational Execution on Strategic Projects
Eastover paper machine optimization, new sheeter installation, and woodyard modernization are on schedule; Säffle mill investment has shifted mix toward roll business and order books are reported full. Management is prioritizing projects with fastest payback to improve cost and cash conversion.
Track Record Since Independence
Since becoming independent ~4 years ago the company reports $2,500,000,000 in adjusted EBITDA earned, >$800,000,000 invested to strengthen the business, >$960,000,000 in free cash flow generated, >$675,000,000 of debt reduction, and >$500,000,000 returned to shareowners.
Negative Updates
Quarter-over-Quarter EBITDA Decline
Q4 adjusted EBITDA of $125,000,000 versus $151,000,000 in the prior quarter, a decline of $26,000,000 (~17% QoQ). Drivers included unfavorable pricing/mix (-$21,000,000), planned maintenance/outage costs (-$17,000,000), and seasonally higher Europe costs, partially offset by volume (+$18,000,000).
Prolonged European Market Weakness and Pricing Pressure
European cut-size paper prices exited 2025 €100 per ton below the 2024 year-end level. Margins in Europe are described as 'very compressed' and recovery depends on price realization (management expects realizations to begin in Q2).
Elevated Fiber/Wood Costs and Lagged Relief
Wood costs in southern Sweden rose materially and are only 'starting to ease' with a 3–6 month lag expected before operational relief—contributing to European margin pressure and making Nymölla performance challenging.
North America Transition and Significant One-Time 2026 Impacts
2026 North America impacts include ~55,000 tons lower sales volume (100,000 tons from Riverdale vs. 260,000 in 2025), 30,000 tons lost due to extended Eastover outage, and sourcing ~80,000 tons from Europe. Management forecasts ~ $65,000,000 North America adjusted EBITDA hit (20M from lower sales, 20M from external sourcing/conversion/freight, 25M one-time outage costs), a ~$20,000,000 Q1 EBITDA hit, ~ $20,000,000 Europe EBITDA impact from tariffs/freight, ~$25,000,000 working capital drag, and an additional $10,000,000 Riverdale cold-weather charge — totaling roughly $95,000,000 of largely one-time 2026 charges.
Capital Intensity Pressures and Paused Repurchases
Higher 2026 capex ($245,000,000) and inventory build prompted management to pause share repurchases in the quarter. Free cash flow in 2025 was modest at $44,000,000, and 2025 shareholder returns ($155,000,000) represented a large use of cash relative to that FCF level.
Reduced Short-Term Financial Guidance and Visibility
Management has discontinued providing full-year adjusted EBITDA and quarterly adjusted EBITDA outlooks (decision from 2024) which may reduce near-term guidance clarity for analysts, despite commitments to provide detailed disclosures in calls and the planned Investor Day.
Company Guidance
Management said it will no longer provide full‑year adjusted EBITDA or free cash flow guidance (or a quarterly adjusted EBITDA outlook) but will continue to disclose selected metrics; for 2026 it guides capital spending of $245 million (including the bulk of a $145 million Eastover program that will add ~60,000 tons of uncoated freesheet and require a ~45‑day outage), characterizes 2026 as a North America transition year with ~ $65 million of negative adjusted EBITDA impacts (≈$20M from ~55,000 tons lower sales volume, ≈$20M from external sourcing/conversion/freight and ≈$25M of Eastover one‑time outage costs), an additional ≈$20M European EBITDA headwind from shipping ~80,000 tons to the U.S. (tariffs/freight), a ~$10M one‑time Riverdale energy charge in Q1 (bringing largely non‑recurring costs to roughly $95M), and a ~ $25M negative working‑capital timing impact; management expects capex to normalize in 2027 and, as markets recover and investments ramp, believes the company can generate >$300M of annual free cash flow and >15% returns on invested capital.Sylvamo Corp Financial Statement Overview
Summary
Fundamentals are mixed: the balance sheet is improved and leverage appears manageable for the cycle, but 2025 showed a clear downturn with revenue declining and net income dropping sharply. Cash generation remains positive but weakened materially year-over-year and has been volatile, which raises risk in a weaker pricing/cost environment.Income Statement
Profitability and scale remain solid, but the earnings trajectory has weakened materially. Revenue moved from modest growth in 2023–2024 to a decline in 2025 (annual revenue down to $3.35B). Operating profit and net income also stepped down sharply in 2025 (net income $132M vs. $302M in 2024), signaling margin pressure and/or a tougher pricing/cost environment. The multi-year record still shows the business can produce strong operating profit in better conditions, but the latest annual results point to a downcycle and reduced earnings power.44
Neutral
Balance Sheet
Leverage has improved versus earlier years and is currently manageable. Total debt was $853M against $966M of equity in 2025, and equity has expanded meaningfully since 2021, reducing balance-sheet risk compared with the period when leverage was extremely high. That said, debt remains significant for a cyclical paper/forest products business, and asset levels are broadly stable, so the key risk is reduced earnings in weaker years making leverage feel heavier.63
Positive
Cash Flow
Cash generation is adequate but less consistent than ideal. Operating cash flow fell to $268M in 2025 from $469M in 2024, aligning with the earnings slowdown. Free cash flow in 2025 was also $268M, and free cash flow matched net income (1.0x), which is a positive quality signal for that year. However, the year-to-year pattern has been volatile (free cash flow growth swung from declines to sharp increases), which can limit flexibility in a downturn.55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.35B | 3.77B | 3.72B | 3.63B | 2.83B |
| Gross Profit | 556.00M | 940.00M | 912.00M | 1.01B | 685.00M |
| EBITDA | 430.00M | 617.00M | 572.00M | 645.00M | 485.00M |
| Net Income | 132.00M | 302.00M | 253.00M | 118.00M | 331.00M |
Balance Sheet | |||||
| Total Assets | 2.76B | 2.60B | 2.87B | 2.71B | 2.60B |
| Cash, Cash Equivalents and Short-Term Investments | 135.00M | 205.00M | 220.00M | 360.00M | 159.00M |
| Total Debt | 853.00M | 804.00M | 959.00M | 1.03B | 1.40B |
| Total Liabilities | 1.80B | 1.76B | 1.97B | 2.03B | 2.42B |
| Stockholders Equity | 966.00M | 847.00M | 901.00M | 678.00M | 182.00M |
Cash Flow | |||||
| Free Cash Flow | 268.00M | 248.00M | 294.00M | 289.00M | 480.00M |
| Operating Cash Flow | 268.00M | 469.00M | 504.00M | 438.00M | 549.00M |
| Investing Cash Flow | -224.00M | -221.00M | -377.00M | 180.00M | 127.00M |
| Financing Cash Flow | -125.00M | -310.00M | -219.00M | -470.00M | -589.00M |
Sylvamo Corp Technical Analysis
Neutral
48.70
Price Trends
49.72
Negative
46.70
Positive
47.38
Positive
Market Momentum
-0.19
Positive
46.45
Neutral
13.56
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SLVM, the sentiment is Neutral. The current price of 48.7 is below the 20-day moving average (MA) of 49.99, below the 50-day MA of 49.72, and above the 200-day MA of 47.38, indicating a neutral trend. The MACD of -0.19 indicates Positive momentum. The RSI at 46.45 is Neutral, neither overbought nor oversold. The STOCH value of 13.56 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SLVM.
Sylvamo Corp Risk Analysis
Sylvamo Corp disclosed 1 risk factors in its most recent earnings report. Sylvamo Corp reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sylvamo Corp Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $6.49B | 20.79 | 9.78% | 1.53% | -3.90% | -25.97% | |
67 Neutral | $13.74B | 5.61 | 35.49% | 1.96% | 6.65% | 47.88% | |
64 Neutral | $6.02B | 41.36 | 8.58% | 1.37% | -3.26% | -46.80% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
56 Neutral | $1.88B | 14.83 | 14.56% | 3.51% | -8.92% | -32.30% | |
44 Neutral | $271.69M | -12.24 | -10.47% | ― | -21.76% | -1214.73% | |
44 Neutral | $142.00M | -0.28 | -39.37% | 10.77% | -5.85% | 9.13% |
* Basic Materials Sector Average
SLVM
Sylvamo Corp
48.70
-17.00
-25.88%
CLW
Clearwater Paper
15.27
-13.09
-46.16%
LPX
Louisiana-Pacific
81.28
-15.23
-15.78%
MERC
Mercer International
2.06
-5.59
-73.07%
UFPI
UFP Industries
109.77
4.61
4.38%
SUZ
Suzano Papel e Celulose SA
10.99
1.26
12.98%
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.