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KP Tissue (TSE:KPT)
:KPT
Canadian Market

KP Tissue (KPT) AI Stock Analysis

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KP Tissue

(TSX:KPT)

Rating:59Neutral
Price Target:
KP Tissue's overall stock score reflects a mix of strengths and challenges. The strong balance sheet and positive earnings call outlook are significant positives, enhancing stability and growth potential. However, profitability issues, high P/E ratio, and mixed technical indicators present cautionary elements. The attractive dividend yield provides some valuation support, but overall, the stock's performance hinges on continued operational improvements and strategic execution amid external challenges.

KP Tissue (KPT) vs. iShares MSCI Canada ETF (EWC)

KP Tissue Business Overview & Revenue Model

Company DescriptionKP Tissue Inc., through its interest in Kruger Products L.P., produces, distributes, markets, and sells a range of disposable tissue products in Canada and the United States. The company operates through two segments, Consumer and Away-From-Home. It offers bathroom and facial tissues, paper towels, and napkins, as well as manufactures private label tissue products. The company markets its products under the Cashmere, Purex, SpongeTowels, Scotties, White Swan, White Cloud, Chalet, Embassy, White Swan, and Metro brand names. The company sells its products to consumers through traditional retail channels, such as grocery stores, mass merchandisers, club and drug stores, convenience stores, and online retailers; and through distributors to businesses involved in commercial users in the property management, healthcare, food services, manufacturing, lodging industries, and public facilities. KP Tissue Inc. was incorporated in 2012 and is headquartered in Mississauga, Canada.
How the Company Makes MoneyKP Tissue makes money through its equity interest in Kruger Products L.P., which generates revenue by manufacturing and distributing tissue products across North America. The company earns money by selling these products to major retailers, wholesalers, and commercial clients. Key revenue streams include sales from branded consumer products and private label offerings. Additionally, Kruger Products L.P. engages in strategic partnerships and has a robust distribution network that enhances its market reach, thereby contributing to its earnings.

KP Tissue Earnings Call Summary

Earnings Call Date:May 14, 2025
(Q1-2025)
|
% Change Since: 6.91%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance in revenue growth and adjusted EBITDA, driven by increased sales and successful operational expansions. However, challenges were noted in the Away-From-Home segment's profitability and the impact of tariffs and higher pulp prices on costs. Overall, the positive aspects of growth and successful project implementation outweigh the negative implications of cost challenges and trade disruptions.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Revenue increased by nearly 14% in Q1 2025 year-over-year, driven by pre-shipped volume ahead of tariffs, favorable selling prices, and positive foreign exchange impact.
Increase in Adjusted EBITDA
Adjusted EBITDA grew nearly 13% year-over-year to $75.8 million, attributed to higher sales volume, increased selling prices, and lower manufacturing overhead costs.
U.S. Sales Performance
U.S. sales showed a strong upward trend with growth of 21.7% year-over-year.
Sherbrooke Expansion Project Success
The new LDC paper machine in Sherbrooke exceeded start-up expectations and is anticipated to meet all in-house paper requirements in Q2 2025.
Sustainability Achievements
Reported a 26% reduction in GHG emissions, a 35% decrease in water consumption, and 100% use of certified fibers.
Negative Updates
Away-From-Home Segment Profitability Decrease
AFH adjusted EBITDA decreased $5 million year-over-year, impacted by external purchased paper, higher fiber prices, and one-time warehousing expenses.
Impact of Tariffs and Trade Disruptions
The estimated impact related to trade disruptions on business amounted to approximately $3 million in Q1 2025.
Higher Pulp Prices
Year-over-year average prices for NBSK and BEK pulp were up 29.5% and 10.5% respectively versus Q1 2024, affecting cost structures.
Company Guidance
In the first quarter of fiscal year 2025, KP Tissue reported impressive financial results, highlighted by a 13.9% year-over-year increase in revenue to $546.1 million and a robust adjusted EBITDA of $75.8 million, reflecting a 13% growth from the same period last year. The Consumer segment saw a significant 15.1% rise in revenue, driven by a 21.7% increase in U.S. sales and a 7.6% increase in Canada, supported by higher sales volumes and improved pricing. Despite higher pulp prices, freight costs, and the impact of tariffs, the company managed to enhance its profitability, as evidenced by a net income increase to $15.4 million, up from $9 million in Q1 2024. The Away-From-Home segment, although challenged by external paper purchases and higher fiber costs, is expected to benefit from the new LDC paper machine in Sherbrooke starting Q2 2025. KP Tissue is also poised to invest between $80 million and $100 million in capital expenditures for the year, with key investments in the Sherbrooke Expansion Project, which is anticipated to enhance production capabilities and support sustained growth amid an unpredictable economic climate.

KP Tissue Financial Statement Overview

Summary
KP Tissue's financial performance is mixed. The balance sheet is robust with no leverage, enhancing stability and scoring high. However, the income statement reveals profitability issues with historical losses, and cash flow analysis shows variability, indicating potential instability. The overall financial picture is cautiously optimistic but with significant challenges.
Income Statement
20
Very Negative
The income statement shows consistent challenges with profitability, as evidenced by negative EBIT in most periods. The company managed a positive net income in TTM (Trailing-Twelve-Months) but has faced historical losses. Revenue data is missing, making margin analysis impossible.
Balance Sheet
85
Very Positive
The balance sheet is strong with zero debt, reflected in a favorable debt-to-equity ratio. The equity ratio is high, indicating a stable financial structure. The company has maintained healthy stockholders' equity over the years.
Cash Flow
50
Neutral
Cash flow analysis shows variability, with operating cash flow improving in TTM (Trailing-Twelve-Months). Free cash flow was positive in the latest period, but historical fluctuations suggest potential instability in cash management. The operating cash flow to net income ratio indicates some operational efficiency.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
0.000.000.000.000.00
Gross Profit
0.000.000.000.000.00
EBIT
0.000.00-12.55M-321.00K-634.00K
EBITDA
619.00K238.61M752.00K153.43M197.84M
Net Income Common Stockholders
2.43M-4.94M-10.25M1.24M-1.95M
Balance SheetCash, Cash Equivalents and Short-Term Investments
0.000.000.000.000.00
Total Assets
71.31M70.61M81.71M80.72M71.31M
Total Debt
0.000.000.000.000.00
Net Debt
0.000.000.000.000.00
Total Liabilities
1.80M2.25M7.68M4.85M4.99M
Stockholders Equity
69.52M68.36M74.03M75.87M66.33M
Cash FlowFree Cash Flow
0.006.98M6.62M1.15M-2.44M
Operating Cash Flow
0.006.98M6.62M1.15M-2.44M
Investing Cash Flow
6.97M6.98M6.62M5.56M5.59M
Financing Cash Flow
-6.97M-6.98M-6.62M-5.56M-5.59M

KP Tissue Technical Analysis

Technical Analysis Sentiment
Positive
Last Price8.97
Price Trends
50DMA
8.23
Positive
100DMA
8.02
Positive
200DMA
7.97
Positive
Market Momentum
MACD
0.23
Negative
RSI
76.50
Negative
STOCH
90.98
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:KPT, the sentiment is Positive. The current price of 8.97 is above the 20-day moving average (MA) of 8.67, above the 50-day MA of 8.23, and above the 200-day MA of 7.97, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 76.50 is Negative, neither overbought nor oversold. The STOCH value of 90.98 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:KPT.

KP Tissue Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
C$12.32B18.8112.64%1.51%1.05%-6.94%
TSMRU
77
Outperform
C$23.67B24.1714.26%1.32%2.31%4.45%
TSMFI
73
Outperform
C$3.39B35.776.05%3.30%3.16%
TSRSI
72
Outperform
C$722.30M11.5914.43%6.38%11.35%-4.31%
TSPBH
68
Neutral
C$3.65B30.666.75%4.18%6.29%24.34%
65
Neutral
$8.91B14.974.70%203.30%3.50%-2.45%
TSKPT
59
Neutral
C$89.71M29.364.37%8.06%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:KPT
KP Tissue
8.97
1.40
18.49%
TSE:EMP.A
Empire Co Cl A NV
53.99
22.72
72.66%
TSE:MFI
Maple Leaf Foods
27.34
5.25
23.77%
TSE:MRU
Metro Inc.
107.96
34.26
46.49%
TSE:PBH
Premium Brands
81.21
-4.97
-5.77%
TSE:RSI
Rogers Sugar
5.64
0.21
3.87%

KP Tissue Corporate Events

DividendsBusiness Operations and Strategy
KP Tissue Declares Quarterly Dividend and Offers Reinvestment Plan
Positive
Mar 5, 2025

KP Tissue Inc. announced a quarterly dividend of $0.18 per common share, payable on April 15, 2025, to shareholders of record as of March 31, 2025. This dividend declaration aligns with a corresponding distribution by Kruger Products Inc., in which KPT holds a limited partnership interest. Additionally, KP Tissue offers a Dividend Reinvestment Plan (DRIP) for Canadian shareholders, allowing them to reinvest cash dividends into additional common shares. This announcement underscores KPT’s commitment to providing shareholder value and maintaining its strategic investment in Kruger Products, a key player in the North American tissue market.

Business Operations and StrategyFinancial Disclosures
KP Tissue Achieves Record Revenue in 2024 Amid Expansion Plans
Positive
Mar 5, 2025

KP Tissue Inc. reported record revenue exceeding $2 billion for 2024, with strong Adjusted EBITDA across all quarters, despite challenges like volatile pulp prices. The company is exploring the construction of a new manufacturing facility to enhance its market share and product offerings in North America. Additionally, KP Tissue is preparing contingency plans to address potential U.S. tariffs and is leveraging patriotic consumer sentiment in Canada through marketing campaigns.

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.