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Cascades Inc (TSE:CAS)
:CAS
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Cascades
(OTC:CAS)
60Neutral
Cascades (CAS) vs. S&P 500 (SPY)
Market Cap
C$974.59M
Dividend Yield5.06%
Average Volume (3M)211.05K
Price to Earnings (P/E)―
Beta (1Y)0.95
Revenue Growth1.36%
EPS Growth59.36%
CountryCA
Employees9,700
SectorConsumer Cyclical
Sector Strength55
IndustryPackaging & Containers
Share Statistics
EPS (TTM)-0.31
Shares Outstanding100,993,774
10 Day Avg. Volume203,421
30 Day Avg. Volume211,051
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.21
Price to Cash Flow (P/CF)1.60
P/FCF Ratio1.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$14.13Price Target Upside46.38% Upside
Rating ConsensusHold
Number of Analyst Covering4
Cascades Business Overview & Revenue Model
Company DescriptionCascades Inc. (CAS) is a Canadian company specializing in the production, conversion, and marketing of packaging and tissue products composed mainly of recycled fibers. Operating across North America and Europe, Cascades serves various sectors including food packaging, hygiene products, and sustainable manufacturing solutions. The company is committed to environmental responsibility and innovation, leveraging recycled materials to deliver sustainable products.
How the Company Makes MoneyCascades Inc. generates revenue primarily through the sale of packaging and tissue products. The company's revenue streams are categorized into two main segments: Packaging Products and Tissue Papers. Within the Packaging Products segment, Cascades offers a range of solutions for food, consumer, and industrial markets, focusing on eco-friendly, recycled materials. The Tissue Papers segment provides products for both the consumer and away-from-home markets, including bathroom tissue, paper towels, and napkins. These products are distributed to retailers, wholesalers, and institutional clients. Cascades also benefits from strategic partnerships and collaborations that enhance its market presence and operational efficiency, alongside investments in technology and sustainable practices that contribute to its profitability.
Cascades Financial Statement Overview
Summary
Cascades shows resilience in its gross profit margin and operational cash flow, indicating efficient operations despite a challenging environment. However, persistent net losses and high leverage remain concerns, impacting profitability and posing financial risk. While the company has managed to sustain modest revenue growth, improving bottom-line profitability and managing debt levels will be crucial for future financial health.Income Statement
Cascades has demonstrated a strong gross profit margin at 39.44% for 2024, showing efficient cost management in production. However, the net profit margin is negative at -0.66%, indicating the company is not profitable at the bottom line due to high operating costs and interest expenses. Revenue growth is modest at 1.36% from 2023 to 2024, suggesting slow but stable growth. The EBIT margin at 2.02% and EBITDA margin at 8.34% highlight some profitability constraints, though EBITDA shows decent operational cash generation.72
Positive
Balance Sheet
The company has a relatively high debt-to-equity ratio of 1.23, indicating significant leverage which could pose a risk in rising interest rate environments. Stockholders' equity has been stable, contributing to an equity ratio of 34.48% for 2024, showcasing a reasonable proportion of the company’s assets being financed by equity. Return on equity is negative at -1.80%, reflecting net losses and the impact on shareholder value.65
Positive
Cash Flow
Operating cash flow remains strong at $272 million in 2024, although it has decreased from the previous year. The free cash flow to net income ratio is negative due to net losses, yet the company has maintained positive free cash flow of $88 million. The operating cash flow to net income ratio is robust at -8.77, indicating strong cash flow generation relative to net income losses.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.70B | 4.64B | 4.47B | 3.96B | 5.16B | Gross Profit |
| 1.85B | 1.66B | 1.63B | 491.00M | 836.00M | EBIT |
| 95.00M | 40.00M | 141.00M | 151.00M | 366.00M | EBITDA |
| 392.00M | 307.00M | 273.00M | 281.00M | 548.00M | Net Income Common Stockholders |
| -31.00M | -76.00M | -14.00M | -47.00M | 198.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 28.00M | 54.00M | 111.00M | 175.00M | 389.00M | Total Assets |
| 5.00B | 4.77B | 5.05B | 4.57B | 5.41B | Total Debt |
| 2.12B | 1.94B | 2.07B | 1.52B | 2.06B | Net Debt |
| 2.10B | 1.88B | 1.97B | 1.35B | 1.68B | Total Liabilities |
| 3.23B | 2.99B | 3.13B | 2.64B | 3.46B | Stockholders Equity |
| 1.72B | 1.74B | 1.87B | 1.88B | 1.75B |
| Cash Flow | Free Cash Flow | |||
| 88.00M | 159.00M | -362.00M | -90.00M | 324.00M | Operating Cash Flow |
| 272.00M | 510.00M | 144.00M | 211.00M | 587.00M | Investing Cash Flow |
| -150.00M | -332.00M | -486.00M | -247.00M | -203.00M | Financing Cash Flow |
| -149.00M | -225.00M | 272.00M | -529.00M | -156.00M |
Cascades Technical Analysis
Negative
9.65
Price Trends
11.00
Negative
11.46
Negative
10.50
Negative
Market Momentum
-0.44
Negative
23.98
Positive
16.39
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CAS, the sentiment is Negative. The current price of 9.65 is below the 20-day moving average (MA) of 9.83, below the 50-day MA of 11.00, and below the 200-day MA of 10.50, indicating a bearish trend. The MACD of -0.44 indicates Negative momentum. The RSI at 23.98 is Positive, neither overbought nor oversold. The STOCH value of 16.39 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CAS.
Cascades Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | C$299.95M | 13.60 | 6.61% | 6.89% | 24.29% | -27.59% | |
60 Neutral | C$974.59M | ― | -1.80% | 5.06% | 1.36% | 59.36% | |
59 Neutral | $11.76B | 10.11 | -0.70% | 3.92% | 1.27% | -16.30% | |
58 Neutral | $1.65B | ― | -18.83% | ― | -3.20% | -107.88% | |
50 Neutral | $742.48M | ― | -18.73% | ― | -8.81% | -13.99% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:CAS
Cascades
9.32
0.40
4.53%
TSE:IFP
Interfor
13.99
-4.97
-26.21%
TSE:CFP
Canfor
13.56
-2.02
-12.97%
TSE:ADN
Acadian Timber
16.52
-0.21
-1.26%
Cascades Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -23.75% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with solid sales growth and performance in key business segments offset by significant impairment charges and concerns over potential tariffs impacting future performance. The company is taking steps to mitigate risks, but uncertainties remain.Highlights
Stable Sales Growth
Sales levels were stable versus Q3 and increased 6% year-over-year, with sequentially favorable average selling prices and exchange rates as tailwinds.
Containerboard Segment Performance
Containerboard sales were stable sequentially, with EBITDA of $104 million representing a 16% increase from Q3. Year-over-year sales increased by 9% with EBITDA levels increasing 55%.
Specialty Products Business Growth
Q4 sales increased 4% from Q3 on improved selling price, sales mix, and exchange rate. Year-over-year, sales increased 9% with EBITDA improving by 47%.
Cash Flow from Operations
Fourth quarter adjusted cash flow from operations was $129 million, up from $103 million in the year-ago period and from $86 million in Q3.
Lowlights
Impairment and Restructuring Costs
$8 million of restructuring costs and $55 million of impairment charges impacted EBITDA due to a previously closed plant and production line discontinuations in the US.
Tissue Business EBITDA Decline
Year-over-year EBITDA in the Tissue business decreased by $16 million due to higher raw material costs.
Uncertainty Due to Potential Tariffs
Concerns about potential bilateral tariffs between Canada and the US could affect 15% of revenues, leading to strategic adjustments and uncertainty in the outlook.
Increased Corporate Costs
Corporate activities contribution was $11 million lower this quarter compared to Q3 due to unfavorable exchange rate variation and higher health insurance costs for US employees.
Company Guidance
During the fourth quarter of 2024, Cascades reported stable sales levels compared to Q3, with a 6% increase year-over-year. The company achieved a consolidated EBITDA of $146 million, marking a 4% increase from the previous quarter and a 20% rise year-over-year, driven by stronger packaging contributions and lower raw material costs. Average OCC prices fell 23% from Q3 and remained stable year-over-year, while the white recycled paper grade saw a 7% sequential decline and a 14% drop year-over-year. Pulp prices decreased 4% for softwood and 12% for hardwood sequentially, yet remained higher year-over-year by 29% and 20%, respectively. The Containerboard segment saw a 16% sequential EBITDA rise to $104 million, with a 9% year-over-year sales increase. The Specialty Products segment experienced a 4% sales increase from Q3 and a 9% rise year-over-year. The Tissue business reported a 1% sales increase from Q3, with a 5% rise in EBITDA, although year-over-year sales increased by just 1% due to higher raw material costs. The company also addressed potential bilateral tariffs, which could impact approximately 15% of revenues, and outlined strategic priorities focused on operational excellence, commercial alignment, and debt reduction.Cascades Corporate Events
Business Operations and StrategyFinancial Disclosures
Cascades Inc. Sees Improved 2024 Financial Performance Despite Challenges
Neutral
Feb 20, 2025
Cascades Inc. reported its financial results for the fourth quarter and full year 2024, highlighting a slight increase in sales and improved operating income compared to the previous year. Despite a net loss per common share, the company’s adjusted EBITDA improved, indicating better operational efficiency. The Containerboard and Specialty Products segments performed well due to favorable pricing and raw material costs. However, the depreciation of the Canadian dollar affected reported debt levels. Looking forward, Cascades anticipates higher capital expenditures in 2025 to support its growth and operational strategies.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.