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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. (KPT) is a Canadian company that focuses on managing its interest in Kruger Products L.P., a leading manufacturer and distributor of quality tissue products for both consumer and away-from-home markets. The company operates primarily in the consumer goods sector, providing a wide array of products such as bathroom tissue, facial tissue, paper towels, and napkins under popular brands like Cashmere, Purex, Scotties, and SpongeTowels.
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: 12.39%|
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue0.000.000.000.000.00
Gross Profit0.000.000.000.000.00
EBITDA619.00K238.61M115.99M153.43M197.84M
Net Income2.43M-4.94M-10.25M1.24M-1.95M
Balance Sheet
Total Assets71.31M70.61M81.71M80.72M71.31M
Cash, Cash Equivalents and Short-Term Investments0.000.000.000.000.00
Total Debt0.000.000.000.000.00
Total Liabilities1.80M2.25M7.68M4.85M4.99M
Stockholders Equity69.52M68.36M74.03M75.87M66.33M
Cash Flow
Free Cash Flow0.006.98M6.62M1.15M-2.44M
Operating Cash Flow0.006.98M6.62M1.15M-2.44M
Investing Cash Flow6.97M6.98M6.62M5.56M5.59M
Financing Cash Flow-6.97M-6.98M-6.62M-5.56M-5.59M

KP Tissue Technical Analysis

Technical Analysis Sentiment
Positive
Last Price9.25
Price Trends
50DMA
8.65
Positive
100DMA
8.16
Positive
200DMA
7.96
Positive
Market Momentum
MACD
0.15
Positive
RSI
64.50
Neutral
STOCH
38.37
Neutral
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 9.25 is above the 20-day moving average (MA) of 9.05, above the 50-day MA of 8.65, and above the 200-day MA of 7.96, indicating a bullish trend. The MACD of 0.15 indicates Positive momentum. The RSI at 64.50 is Neutral, neither overbought nor oversold. The STOCH value of 38.37 is Neutral, 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 (53)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
C$12.82B18.7713.02%1.45%1.05%-6.94%
TSMRU
76
Outperform
C$22.63B23.1614.26%1.43%2.31%4.45%
TSRSI
72
Outperform
C$723.58M11.6114.43%6.37%11.35%-4.31%
TSMFI
72
Outperform
C$3.51B37.016.05%3.39%3.16%
TSPBH
66
Neutral
C$3.68B30.976.75%4.14%6.29%24.34%
TSKPT
59
Neutral
C$91.51M29.954.37%7.78%
53
Neutral
C$4.38B3.83-22.83%4.39%8.13%2.00%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:KPT
KP Tissue
9.15
1.30
16.56%
TSE:MRU
Metro Inc.
105.44
29.17
38.25%
TSE:EMP.A
Empire Co Cl A NV
55.80
21.40
62.21%
TSE:MFI
Maple Leaf Foods
28.65
7.02
32.45%
TSE:RSI
Rogers Sugar
5.65
0.44
8.45%
TSE:PBH
Premium Brands
83.78
-7.55
-8.27%

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
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.Date of analysis: Apr 02, 2025