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Clearwater Paper Corp (CLW)
:CLW
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Clearwater Paper
(NYSE:CLW)58Neutral
Clearwater Paper (CLW) vs. S&P 500 (SPY)
Market Cap
$405.51M
Dividend YieldN/A
Average Volume (3M)292.35K
Price to Earnings (P/E)33.7
Beta (1Y)0.56
Revenue Growth-10.55%
EPS Growth-203.13%
CountryUS
Employees3,100
SectorBasic Materials
Sector Strength56
IndustryForestry
Share Statistics
EPS (TTM)-6.64
Shares Outstanding16,175,161
10 Day Avg. Volume287,892
30 Day Avg. Volume292,353
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.19
Price to Cash Flow (P/CF)4.80
P/FCF Ratio3.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$37.00Price Target Upside47.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Clearwater Paper Business Overview & Revenue Model
Company DescriptionClearwater Paper Corporation (CLW) is a leading manufacturer and supplier of private label tissue and bleached paperboard products. Headquartered in Spokane, Washington, the company operates through two primary segments: Consumer Products and Pulp and Paperboard. Clearwater Paper's Consumer Products segment focuses on producing private label tissue products, including paper towels, bathroom tissue, napkins, and facial tissue, for major retail chains. The Pulp and Paperboard segment provides bleached paperboard for a variety of applications, including packaging for consumer products, food service, and containerboard.
How the Company Makes MoneyClearwater Paper makes money primarily through the production and sale of its tissue and paperboard products. The Consumer Products segment generates revenue by manufacturing and distributing private label tissue products to retail customers, who then sell these under their own brand names. This segment benefits from long-term supply agreements with major retail chains, ensuring a steady revenue stream. The Pulp and Paperboard segment earns revenue by selling bleached paperboard to packaging manufacturers and converters, who use it in the production of consumer goods packaging, food service items, and containerboard. The company's earnings are influenced by factors such as raw material costs, production efficiency, and the demand for private label products, as well as strategic partnerships with large retailers and industrial customers.
Clearwater Paper Financial Statement Overview
Summary
Clearwater Paper's financial performance is mixed. Despite a strong net profit margin and improved net income, revenue has declined, and cash flow challenges are apparent with a negative free cash flow. The balance sheet shows reduced financial leverage and improved equity metrics, suggesting a solid financial position, but cash flow issues may impact financial flexibility.Income Statement
Clearwater Paper's revenue shows a decline of 10.54% in the TTM compared to the previous year, with total revenue of $1.863 billion. Despite the revenue drop, the company reported a strong net profit margin of 10.54% for the TTM due to a net income of $196.3 million, up significantly from $107.7 million in 2023. Gross profit margin decreased, reflecting reduced operational efficiency. EBIT and EBITDA margins are also lower, indicating challenges in controlling operating costs.70
Positive
Balance Sheet
The balance sheet reveals a solid equity position with a debt-to-equity ratio of 0.33 as of the TTM, improved from 0.72 in 2023, indicating reduced financial leverage. The equity ratio stands at 50.89%, showing strong equity financing. Return on equity improved significantly to 22.98% due to the substantial increase in net income, suggesting efficient use of equity capital. However, total assets have remained relatively stable, indicating limited growth in asset base.75
Positive
Cash Flow
Cash flows depict a concerning trend with a negative free cash flow of $54.8 million in the TTM, down from a positive $117 million in 2023. The operating cash flow to net income ratio is 0.31, showing that operating cash generation isn't keeping pace with net income growth. Free cash flow to net income ratio is negative, indicating cash flow challenges. This could limit future investments and debt repayment capabilities.62
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.38B | 2.08B | 2.08B | 1.77B | 1.87B | Gross Profit |
| 76.10M | 330.80M | 256.70M | 182.60M | 294.20M | EBIT |
| -64.50M | 177.10M | 113.90M | 1.70M | 158.10M | EBITDA |
| -900.00K | 275.30M | 219.70M | 106.40M | 258.20M | Net Income Common Stockholders |
| 196.30M | 107.70M | 46.00M | -28.00M | 77.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 79.60M | 42.00M | 53.70M | 25.20M | 35.90M | Total Assets |
| 1.68B | 1.67B | 1.70B | 1.69B | 1.80B | Total Debt |
| 282.20K | 478.50M | 565.80M | 639.20M | 787.70M | Net Debt |
| 202.60K | 436.50M | 512.10M | 614.00M | 751.80M | Total Liabilities |
| 824.70M | 1.00B | 1.13B | 1.18B | 1.28B | Stockholders Equity |
| 854.60K | 668.70M | 572.00M | 511.70M | 521.10M |
| Cash Flow | Free Cash Flow | |||
| -54.80M | 117.00M | 116.70M | 58.00M | 207.40M | Operating Cash Flow |
| 61.40M | 190.70M | 150.20M | 96.40M | 247.00M | Investing Cash Flow |
| 167.30M | -73.70M | -33.50M | -25.10M | -39.60M | Financing Cash Flow |
| -191.40M | -129.40M | -88.60M | -82.00M | -192.90M |
Clearwater Paper Technical Analysis
Negative
25.07
Price Trends
29.40
Negative
28.11
Negative
35.24
Negative
Market Momentum
-1.08
Positive
33.04
Neutral
10.51
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CLW, the sentiment is Negative. The current price of 25.07 is below the 20-day moving average (MA) of 28.66, below the 50-day MA of 29.40, and below the 200-day MA of 35.24, indicating a bearish trend. The MACD of -1.08 indicates Positive momentum. The RSI at 33.04 is Neutral, neither overbought nor oversold. The STOCH value of 10.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CLW.
Clearwater Paper Risk Analysis
Clearwater Paper disclosed 42 risk factors in its most recent earnings report. Clearwater Paper reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Clearwater Paper Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $26.99B | 32.62 | 6.82% | 3.34% | -1.57% | 84.85% | |
71 Outperform | $19.14B | 23.85 | 18.28% | 2.39% | 7.45% | 5.43% | |
68 Neutral | $4.70B | 28.96 | 7.22% | 4.40% | -6.93% | -65.66% | |
58 Neutral | $405.51M | 33.74 | 22969.81% | ― | -10.55% | -203.13% | |
47 Neutral | $2.64B | -4.00 | -31.55% | 3.33% | 2.93% | -29.90% |
* Basic Materials Sector Average
Performance Comparison
CLW
Clearwater Paper
25.07
-13.86
-35.60%
IP
International Paper Co
51.30
16.91
49.17%
PKG
Packaging
202.27
23.47
13.13%
SON
Sonoco Products
46.27
-8.03
-14.79%
Clearwater Paper Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -13.79% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a transformative year for Clearwater Paper with significant strategic moves like the acquisition of the Augusta facility and divestiture of the tissue business. While these moves and future demand projections are positive, the company faced notable challenges in the fourth quarter due to natural disasters and market pressures. However, the focus on cost reduction and a strong financial position underpin a cautiously optimistic outlook.Highlights
Strategic Acquisitions and Divestitures
Clearwater Paper completed the acquisition of the Augusta Paperboard facility, increasing paperboard capacity by around 70%, and divested its tissue business for $1.06 billion, significantly deleveraging the balance sheet.
Demand and Market Recovery
Industry shipments increased by 4% in 2024 versus 2023, with demand projected to grow by 3% to 5% in 2025, indicating a return to pre-COVID levels and optimism about long-term prospects for paperboard packaging.
Cost Reduction Initiatives
Clearwater is targeting $30 million to $40 million in cost savings in 2025 through SG&A and operations reductions, including a 10% reduction in all positions across the company.
Financial Position
Clearwater significantly reduced net debt by $199 million in 2024, ending the year with a net leverage ratio of 1.1 times.
Lowlights
Fourth Quarter Challenges
$21 million of adjusted EBITDA in Q4 2024, down from $63 million in the previous year, due to fewer contributions from the tissue business, major maintenance expenses, and lower paperboard pricing.
Impact of Hurricane Helene
The Augusta facility was impacted by Hurricane Helene, leading to higher costs and operational disruptions during a planned major maintenance outage.
Pricing and Margin Pressure
The industry continued to operate with utilization rates below historical averages, resulting in lower market pricing and margin pressure.
Company Guidance
In the Clearwater Paper fourth quarter 2024 earnings call, key guidance metrics were discussed, including the impact of strategic transactions and operational performance. The company completed the acquisition of the Augusta Paperboard facility, increasing capacity by about 70% and contributing an expected $140-$150 million to annual adjusted EBITDA. Additionally, Clearwater sold its tissue business for $1.06 billion, using proceeds to significantly reduce debt. For Q4 2024, adjusted EBITDA was $21 million, down from $63 million the previous year, affected by the sale of the tissue business and operational disruptions from Hurricane Helene. The company aims for $30-$40 million in cost savings in 2025 and anticipates first-quarter adjusted EBITDA between $20-$30 million. Clearwater is also targeting revenue of $1.5-$1.6 billion for full-year 2025, expecting demand recovery with utilization rates of approximately 85%. They announced a $100 million share repurchase program, with $9 million already repurchased by February 2025.Clearwater Paper Corporate Events
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Clearwater Paper Announces Strong Q3 2024 Results
Positive
Nov 4, 2024
Clearwater Paper Corporation reported significant financial outcomes for the third quarter of 2024, with net sales from total operations increasing by 24% to $644 million. Despite a net income drop to $6 million, the company remains optimistic about its strategic focus on paperboard packaging. The Board approved a new $100 million share repurchase authorization aimed at enhancing shareholder value amidst challenging industry conditions. Long-term growth prospects are bolstered by recent divestments and a focus on sustainable packaging solutions.
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.