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Sappi
(OTC:SPPJY)
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Rating:48Neutral
Price Target:
$0.94
▲(44.00% Upside)
Action:Reiterated
Date:08/10/26
The score is held down primarily by weak financial performance: sharply negative profitability, higher leverage, and negative free cash flow. Technicals are supportive (price above key moving averages) but are offset by overbought momentum signals (high RSI/Stoch). Earnings-call guidance suggests near-term improvement into Q4, but substantial input-cost, logistics, and FX headwinds keep the outlook cautious, and the negative P/E reflects the current loss-making profile.
Positive Factors
Dissolving wood pulp (DWP) demand
Stronger DWP pricing and low industry inventories indicate durable demand for cellulose inputs used in textiles and chemical derivatives. For Sappi this supports a structurally higher-margin product line that can boost realized spreads and cashflows over multiple quarters if volumes and pricing persist.
Negative Factors
Elevated leverage
Higher debt-to-equity and deeply negative ROE materially reduce financial flexibility and increase refinancing risk. With covenants suspended until March 2027 and management targeting ~ $500m EBITDA to deleverage, meaningful balance-sheet repair depends on multi-period earnings recovery, constraining strategic optionality.
Read all positive and negative factors
Positive Factors
Negative Factors
Dissolving wood pulp (DWP) demand
Stronger DWP pricing and low industry inventories indicate durable demand for cellulose inputs used in textiles and chemical derivatives. For Sappi this supports a structurally higher-margin product line that can boost realized spreads and cashflows over multiple quarters if volumes and pricing persist.
Read all positive factors
Sappi (SPPJY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$531.16M
Dividend YieldN/A
Average Volume (3M)30.00
Price to Earnings (P/E)―
Beta (1Y)1.51
Revenue Growth-2.65%
EPS Growth-950.31%
CountryUS
Employees12,329
SectorBasic Materials
Sector Strength58
IndustryPaper, Lumber & Forest Products
Share Statistics
EPS (TTM)-1.36
Shares Outstanding607,141,500
10 Day Avg. Volume0
30 Day Avg. Volume30
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.37
Price to Sales (P/S)0.16
P/FCF Ratio-2.63
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)-0.86
Revenue Forecast (FY)$5.35B
Sappi Business Overview & Revenue Model
Company Description
Sappi Limited is an international company that provides a variety of sustainable products and solutions derived from renewable wood fibers. Its operations span Europe, North America, and South Africa. The company's diverse product range includes d...
How the Company Makes Money
Sappi makes money primarily by manufacturing cellulose-based materials and selling them to business customers under contracted and spot-market arrangements, with revenue largely tied to shipment volumes and market pricing for its product categorie...
Sappi Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 06, 2026
Earnings Call Sentiment Neutral
The call reflected a balanced but cautious tone: meaningful operational positives (record North American volumes, DWP price momentum, EUR 120m cost savings, disciplined CapEx and strong liquidity) are offset by substantial and persistent cost headwinds (sulphur spike, logistics/diesel inflation, currency strength) and compressed year‑on‑year selling prices. Management expects a materially stronger Q4 and is focused on deleveraging, but achieving normalized EBITDA levels (~$500m target) remains a multi-period challenge.Positive Updates
Q3 EBITDA In Line With Guidance
Reported EBITDA of $53 million for Q3, matching the company’s revised guidance and demonstrating operational resilience despite challenging market conditions.
Negative Updates
Major Sulphur Price Spike and Cost Impact
Sulphur prices rose from under ~$200/tonne to near $1,200/tonne (roughly a >500% increase), quantified as a ~$350 million year-on-year impact on FY26 raw material costs for the company.
Read all updates
Q3-2026 Updates
Positive
Negative
Q3 EBITDA In Line With Guidance
Reported EBITDA of $53 million for Q3, matching the company’s revised guidance and demonstrating operational resilience despite challenging market conditions.
Read all positive updates
Company Guidance
Management guided that Q4 should be "materially above" Q3 (Q3 EBITDA $53m), driven by the absence of the Ngodwana shut (Q3 carried a ~$22m shut hit), higher DWP prices (DWP up ~ZAR53 in the quarter on a ~1.2m+ tpa portfolio), stronger North American volumes and pricing (Somerset PM2 ramping from ~75% in Q3 to ~85% in Q4; first SBS price increase ~$60/t with realization split between Q4 and Q1 after a 2–3 month lag), and a smaller Somerset shut; they expect some benefits to flow into Q1. They reiterated cost actions (EUR120m saved YTD, incl. EUR29m in Europe) and maintenance CapEx restraint (~$240–250m this year), while warning of headwinds — a ~$350m FY‑26 sulphur hit as sulphur rose from < $200/t to ~ $1,200/t, higher logistics/delivery costs (~$106m direct delivery cost in South Africa) and FX sensitivity ($4m per $0.10 USD/ZAR). Leverage has risen but covenants are suspended until March 2027; management said roughly $500m EBITDA is the target level to begin deleveraging and they plan to monitor refinancing the April 2028 Eurobond (window opens early 2027).Sappi Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
46
Neutral
Cash Flow
29
Negative
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.36B | 5.40B | 5.46B | 5.81B | 7.30B | 5.26B |
| Gross Profit | 336.34M | 534.42M | 776.00M | 907.00M | 1.37B | 549.00M |
| EBITDA | 466.44M | 320.05M | 497.00M | 731.00M | 1.08B | 444.00M |
| Net Income | -826.00M | -176.48M | 33.00M | 259.00M | 536.00M | 13.00M |
Balance Sheet | ||||||
| Total Assets | 5.49B | 6.07B | 6.21B | 5.80B | 6.23B | 6.19B |
| Cash, Cash Equivalents and Short-Term Investments | 203.99M | 218.99M | 317.00M | 601.00M | 780.00M | 366.00M |
| Total Debt | 2.20B | 2.14B | 1.74B | 1.69B | 1.94B | 2.31B |
| Total Liabilities | 3.71B | 3.76B | 3.63B | 3.35B | 3.87B | 4.22B |
| Stockholders Equity | 1.78B | 2.31B | 2.58B | 2.44B | 2.36B | 1.97B |
Cash Flow | ||||||
| Free Cash Flow | -143.60M | -322.05M | -349.00M | 223.00M | 514.00M | 33.00M |
| Operating Cash Flow | 104.39M | 172.49M | 124.00M | 605.00M | 882.00M | 407.00M |
| Investing Cash Flow | -240.82M | -455.65M | -430.00M | -395.00M | -376.00M | -378.00M |
| Financing Cash Flow | 128.87M | 177.47M | -80.00M | -501.00M | -43.00M | 33.00M |
Sappi Technical Analysis
Positive
0.65
Price Trends
0.70
Positive
0.82
Positive
1.04
Negative
Market Momentum
0.06
Negative
63.77
Neutral
69.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPPJY, the sentiment is Positive. The current price of 0.65 is below the 20-day moving average (MA) of 0.77, below the 50-day MA of 0.70, and below the 200-day MA of 1.04, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 63.77 is Neutral, neither overbought nor oversold. The STOCH value of 69.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPPJY.
Sappi Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $10.08B | 6.36 | 17.50% | 2.57% | 0.87% | 12.10% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
59 Neutral | $1.53B | 20.06 | 7.84% | 4.70% | -7.13% | -64.17% | |
58 Neutral | $345.46M | -7.05 | -6.13% | ― | -1.93% | 48.75% | |
58 Neutral | $21.57B | -6.25 | -22.39% | 4.39% | 10.34% | -7165.92% | |
48 Neutral | $531.16M | -0.65 | 3.97% | ― | -2.65% | -950.31% | |
42 Neutral | $31.57M | -0.06 | -242.96% | 11.18% | -4.81% | -372.95% |
* Basic Materials Sector Average
SPPJY
Sappi
0.88
-0.67
-43.11%
CLW
Clearwater Paper
21.42
-0.55
-2.50%
IP
International Paper Co
40.74
-3.91
-8.76%
MERC
Mercer International
0.47
-2.59
-84.61%
SUZ
Suzano Papel e Celulose SA
8.11
-1.42
-14.91%
SLVM
Sylvamo Corp
38.39
-3.58
-8.54%
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.