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Suzano Papel e Celulose SA (SUZ)
NYSE:SUZ
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Suzano Papel e Celulose SA
(NYSE:SUZ)
55Neutral
Positive Factors
Financial Performance
Suzano reported 3Q24 EBITDA at R$6.5bn, 6% above consensus, driven by stronger pulp shipments and higher paper shipments.
Operational Strategy
Suzano continues to strengthen its position as a global cost leader in pulp production by addressing structural challenges through innovative strategies.
Valuation
Suzano is trading at an attractive valuation compared to its historical EV/EBITDA, offering a potential investment opportunity.
Negative Factors
Market Outlook
The company’s outlook for S&D indicates that supply should outpace demand by 2028 – likely triggering pulp price pressure to balance out markets.
Production Strategy
Suzano cuts 2024 pulp production by 4% amid low prices.
Suzano Papel e Celulose SA (SUZ) vs. S&P 500 (SPY)
Market Cap
$11.11B
Dividend Yield2.96%
Average Volume (3M)2.10M
Price to Earnings (P/E)15.7
Beta (1Y)0.38
Revenue Growth10.18%
EPS Growth-146.53%
CountryUS
Employees35,000
SectorBasic Materials
Sector Strength52
IndustryPaper, Lumber & Forest Products
Share Statistics
EPS (TTM)-1.00
Shares Outstanding1,264,117,700
10 Day Avg. Volume2,553,105
30 Day Avg. Volume2,103,468
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)6.96
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.00Price Target Upside103.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Suzano Papel e Celulose SA Business Overview & Revenue Model
Company DescriptionSuzano Papel e Celulose SA (SUZ) is a Brazilian company primarily engaged in the production and sale of pulp and paper products. The company operates in the forestry sector and is one of the largest vertically integrated producers of eucalyptus pulp in the world. Suzano's core products include hardwood pulp, printing and writing paper, tissue paper, and packaging paper. The company serves a variety of markets globally, providing sustainable and innovative solutions for the paper and packaging industries.
How the Company Makes MoneySuzano 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 Papel e Celulose SA demonstrates strong operational efficiency and cash flow generation. However, the company faces challenges with a significant net loss in 2024, coupled with high leverage, which poses financial risks despite its revenue growth and robust operational margins.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.60
Neutral
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.50
Neutral
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.65
Positive
| 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
Negative
8.85
Price Trends
9.70
Negative
9.97
Negative
9.79
Negative
Market Momentum
-0.16
Positive
36.24
Neutral
13.45
Positive
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 8.85 is below the 20-day moving average (MA) of 9.26, below the 50-day MA of 9.70, and below the 200-day MA of 9.79, indicating a bearish trend. The MACD of -0.16 indicates Positive momentum. The RSI at 36.24 is Neutral, neither overbought nor oversold. The STOCH value of 13.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SUZ.
Suzano Papel e Celulose SA Risk Analysis
Suzano Papel e Celulose SA disclosed 45 risk factors in its most recent earnings report. Suzano Papel e Celulose SA 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
Suzano Papel e Celulose SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $3.11B | 24.92 | 11.79% | 2.24% | 6.92% | 33.08% | |
68 Neutral | $2.52B | 8.61 | 34.55% | 2.67% | 0.91% | 22.51% | |
58 Neutral | $405.70M | 33.74 | -5.11% | ― | -10.55% | -203.13% | |
55 Neutral | $11.11B | 15.71 | -17.36% | 2.96% | 10.18% | -146.53% | |
52 Neutral | $284.04M | 4.60 | -5.41% | 7.68% | -13.97% | 84.07% | |
47 Neutral | $362.44M | ― | -15.99% | 5.54% | 2.48% | 65.00% | |
47 Neutral | $2.44B | -2.84 | -22.09% | 3.51% | 4.02% | -28.91% |
* Basic Materials Sector Average
Performance Comparison
SUZ
Suzano Papel e Celulose SA
8.85
-2.74
-23.64%
CLW
Clearwater Paper
24.55
-15.57
-38.81%
MERC
Mercer International
5.26
-3.78
-41.81%
MATV
Mativ Holdings
4.74
-12.06
-71.79%
SXT
Sensient Technologies
72.71
5.88
8.80%
SLVM
Sylvamo Corp
58.91
1.49
2.59%
Suzano Papel e Celulose SA Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -12.38% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call presented a strong performance in sales and EBITDA, with significant operational achievements in both Brazilian and North American markets. However, challenges in Europe, tight inventories, and lower pulp prices were notable concerns. The situation in China also posed operational challenges. Overall, while there are positive achievements, the balance with lowlights leads to a mixed sentiment.Highlights
Record Sales and Strong EBITDA
Suzano achieved record sales for both the fourth quarter and the full year of 2024. The company reported a strong EBITDA of R$23.8 billion for the year, with leverage in dollar terms at 2.9 times.
Ribas Mill Performance
The Ribas mill achieved 900,000 tons of production and 700,000 tons of sales in 2024, in line with guidance after its startup in mid-2024.
Brazilian Market Growth
Sales from domestic producers grew by 12.5% in Brazil, with print and writing demand increasing by 11.7% in the first two months of the fourth quarter compared to the previous year.
Positive North American Packaging Performance
Suzano Packaging U.S. saw a 21% recovery in SPS demand in Q4 2024, driven by strong performance in the food service sector.
Successful Contract Renegotiations
Renegotiation of commercial contracts for Suzano Packaging U.S. secured better terms and synergies for raw materials and logistics.
Lowlights
Challenging European Market
Demand in Europe has become challenging, with paper consumption returning to its declining historical rates.
Inventory and Supply Chain Challenges
Record sales led to tight inventories, presenting challenges to serve customers, particularly in Middle East, Africa, and Asia.
Lower Pulp Prices
Q4 2024 was marked by lower pulp prices due to monthly reductions in Europe and the Americas, affecting EBITDA.
Operational Challenges in China
The unexpected cease of operations by a major Chinese integrated pulp and paper producer affected market dynamics.
Company Guidance
In Suzano's fourth quarter 2024 conference call, the company reported robust operational performance delivering record sales for both the quarter and the year. Production reached 900,000 tons, with 700,000 tons sold, aligning with prior guidance. The company set a new baseline for cash costs and achieved a strong EBITDA of R$23.8 billion, reducing leverage to 2.9 times in dollar terms. Suzano's total sales volume increased by 15% year-over-year and 24% quarter-over-quarter, driven by Suzano Packaging sales. However, EBITDA saw a reduction of 7% quarter-over-quarter and 3% year-over-year, attributed to lower prices and the integration of Suzano Packaging, which is undergoing a turnaround. The company anticipates strong demand for uncoated paper and paperboard in Brazil for 2025 and expects stability in logistics and input costs, absent trade disruptions.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.