Suzano Papel e Celulose SA (SUZ) AI Stock Analysis

• Market Cap: $11.05B
• Dividend Yield: 2.95%
• Average Volume (3M): 1.90M
• Price to Earnings (P/E): 15.7
• Beta (1Y): 0.33
• Revenue Growth: 14.78%
• EPS Growth: -111.06%
• Country: US
• Employees: 35,000
• Sector: Basic Materials
• Sector Strength: 63
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): 0.78
• Shares Outstanding: 1,264,117,700
• 10 Day Avg. Volume: 1,524,821
• 30 Day Avg. Volume: 1,895,540
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $18.00
• Price Target Upside: 102.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Suzano's overall stock score reflects the company's strong operational efficiency and cash flow generation, but also highlights significant challenges in profitability and high leverage. The technical analysis suggests a bearish trend, while the valuation is unattractive due to a negative P/E ratio. The earnings call provided some optimism with strategic focus on deleveraging and operational improvements, but market challenges and cost pressures remain. Overall, the stock presents a mixed outlook with notable risks.

Positive Factors

Cost Leadership

Suzano continues to strengthen its position as a global cost leader in pulp production by addressing structural challenges through innovative strategies.

Financial Performance

Suzano reported 3Q24 EBITDA at R$6.5bn, 6% above consensus, driven by stronger pulp shipments and higher paper shipments.

Valuation

Suzano is trading at an attractive valuation compared to its historical EV/EBITDA, offering a potential investment opportunity.

Negative Factors

Supply and Demand

The company’s outlook for S&D indicates that supply should outpace demand by 2028 – likely triggering pulp price pressure to balance out markets.

Suzano Papel e Celulose SA Business Overview & Revenue Model

Company Description

Suzano S.A. produces and sells eucalyptus pulp and paper products in Brazil and internationally. It operates through Pulp and Paper segments. The company offers coated and uncoated printing and writing papers, paperboards, tissue papers, and market and fluff pulps; and lignin and its byproducts. It also engages in the research, development, and production of biofuel; operation of port terminals; power generation and distribution business; commercialization of equipment and parts; biotechnology research and development; and commercialization of paper and computer materials. In addition, the company is involved in the business office, production packaging, and financial fundraising activities; research, development, production, commercialization, and distribution of wood-based textile fibers, yarns, and filaments produced from cellulose and microfibrillated cellulose; and research and development of wood raw materials for the textile industry. Suzano S.A. was formerly known as Suzano Papel e Celulose S.A. and changed its name to Suzano S.A. in April 2019. The company was founded in 1924 and is headquartered in Salvador, Brazil.

How the Company Makes Money

Suzano Papel e Celulose SA generates revenue primarily through the sale of its pulp and paper products. The company operates a vertically integrated business model, which involves managing its own eucalyptus plantations, manufacturing pulp and paper, and distributing its products worldwide. Key revenue streams include the sale of hardwood pulp, which is used by other manufacturers for various applications, and the sale of finished paper products such as printing and writing paper, tissue, and packaging materials. Suzano's earnings are supported by its strong market presence in both domestic and international markets, strategic partnerships, and long-term contracts with key customers. Additionally, the company's focus on sustainability and innovation enhances its competitiveness and appeal in the growing global market for environmentally friendly paper products.

Suzano Papel e Celulose SA Financial Statement Overview

Summary

Suzano displays strong operational efficiency with robust cash flow generation, but high leverage and a substantial net loss in 2024 impact profitability. Revenue growth is overshadowed by a negative net profit margin. The balance sheet's high debt levels pose financial risks despite significant cash reserves.

Income Statement

The company shows volatility in net income, with a significant net loss in 2024 compared to a high net income in 2023. Revenue growth from 2023 to 2024 is strong at 19.21%, but this is overshadowed by a negative net profit margin due to the net loss. The gross profit margin is stable, and both EBIT and EBITDA margins remain robust, indicating operational efficiency despite the net loss.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio, indicating significant leverage, which poses financial risk. Stockholders' equity has decreased, and the equity ratio is relatively low, highlighting potential instability. However, the company maintains substantial cash reserves, which provide some liquidity cushion.

Cash Flow

Operating cash flow is strong and shows growth, but free cash flow has improved notably from negative in 2023 to positive in 2024. The company effectively converts operating cash flow into free cash flow, though the free cash flow to net income ratio is impacted by the net loss.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
47.40B	39.76B	49.83B	40.97B	30.46B
	Gross Profit
20.00B	14.68B	25.01B	20.35B	11.49B
	EBIT
15.69B	12.22B	22.22B	18.18B	8.44B
	EBITDA
23.46B	29.40B	30.63B	24.62B	12.23B
	Net Income Common Stockholders
-7.07B	14.08B	23.38B	8.63B	-10.71B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
21.99B	21.17B	17.05B	21.10B	9.05B
	Total Assets
165.94B	143.59B	133.20B	118.98B	101.80B
	Total Debt
108.41B	83.42B	80.76B	85.52B	78.09B
	Net Debt
99.39B	75.07B	71.25B	71.93B	71.26B
	Total Liabilities
133.52B	98.78B	100.03B	103.80B	94.46B
	Stockholders Equity
32.28B	44.69B	33.06B	15.08B	7.23B
Cash Flow		Free Cash Flow
4.23B	-241.59M	6.80B	11.39B	8.23B
	Operating Cash Flow
20.60B	17.32B	21.64B	17.64B	13.12B
	Investing Cash Flow
-20.51B	-26.04B	-17.02B	-10.36B	-736.42M
	Financing Cash Flow
-83.77M	7.80B	-8.11B	-1.57B	-9.79B

Suzano Papel e Celulose SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.90
• 50DMA: Negative
• 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 SUZ, the sentiment is Negative. The current price of 8.9 is below the 20-day moving average (MA) of 8.94, below the 50-day MA of 9.18, and below the 200-day MA of 9.73, indicating a bearish trend. The MACD of -0.08 indicates Negative momentum. The RSI at 45.37 is Neutral, neither overbought nor oversold. The STOCH value of 46.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SUZ.

Suzano Papel e Celulose SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SXT	74 Outperform	$4.02B	31.01	11.87%	1.74%	6.30%	41.01%
SLVM	69 Neutral	$2.41B	8.26	31.83%	2.99%	0.91%	22.51%
CLW	60 Neutral	$412.41M	33.74	-8.15%	―	-15.03%	-233.06%
MATV	55 Neutral	$278.58M	4.60	-66.90%	7.30%	-7.46%	-36.14%
SUZ	53 Neutral	$11.05B	15.71	-17.36%	2.95%	14.78%	-111.06%
MERC	51 Neutral	$238.06M	―	-17.96%	8.40%	-1.37%	60.42%
Sector *	49 Neutral	$1.95B	-1.21	-21.28%	3.72%	1.18%	-30.47%