Domtar (NYSE:UFS) (TSE:UFS) was downgraded by Zacks Investment Research from a “buy” rating to a “sell” rating in a research note issued on Tuesday.
According to Zacks, “Despite higher revenues, Domtar missed on fourth-quarter 2017 earnings due to higher operating costs. Adverse foreign currency translation against pulp purchasing currencies is expected to hamper price realizations of Domtar's pulp products. The company faces tremendous competitive pressure from local as well as some global producers, who often have relatively greater financial resources and lower production costs. The revamped market dynamics following Brexit are expected to affect firms like Domtar that has significant presence in the U.K. Brexit could further result in higher tariff and non-tariff barriers to trade between the U.K. and the European Union, lowering its productivity. Domtar has also underperformed the industry in the past three months. However, the company is streamlining the cost structure, improving revenue quality and maintaining a healthy cash flow to improve its future performance.”
Several other analysts have also issued reports on UFS. Stephens initiated coverage on Domtar in a research note on Tuesday, October 24th. They issued an “equal weight” rating and a $43.00 target price on the stock. KeyCorp set a $33.00 price objective on Domtar and gave the company a “sell” rating in a research note on Friday, October 27th. DA Davidson boosted their price objective on Domtar to $37.00 and gave the company an “underperform” rating in a research note on Monday, October 30th. Scotiabank set a $41.00 price objective on Domtar and gave the company a “sector perform” rating in a research note on Monday, October 30th. Finally, National Bank Financial boosted their price objective on Domtar from $42.00 to $46.00 and gave the company a “sector perform” rating in a research note on Monday, October 30th. Four research analysts have rated the stock with a sell rating, eight have issued a hold rating and six have assigned a buy rating to the company. The stock presently has an average rating of “Hold” and an average price target of $44.33.
Domtar (NYSE:UFS) (TSE:UFS) last issued its earnings results on Thursday, February 8th. The basic materials company reported $0.64 earnings per share (EPS) for the quarter, missing the Thomson Reuters’ consensus estimate of $0.69 by ($0.05). The firm had revenue of $1.34 billion during the quarter, compared to the consensus estimate of $1.31 billion. Domtar had a negative net margin of 4.11% and a positive return on equity of 6.00%. The business’s quarterly revenue was up 4.9% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $0.75 earnings per share. equities analysts forecast that Domtar will post 3.01 EPS for the current year.
A number of hedge funds and other institutional investors have recently made changes to their positions in UFS. Pictet Asset Management Ltd. bought a new position in Domtar in the 3rd quarter worth about $20,535,000. Acadian Asset Management LLC boosted its holdings in shares of Domtar by 644.5% in the 4th quarter. Acadian Asset Management LLC now owns 371,502 shares of the basic materials company’s stock worth $18,397,000 after purchasing an additional 321,603 shares in the last quarter. Point72 Asset Management L.P. boosted its holdings in shares of Domtar by 727.2% in the 3rd quarter. Point72 Asset Management L.P. now owns 248,157 shares of the basic materials company’s stock worth $10,768,000 after purchasing an additional 218,157 shares in the last quarter. Wells Fargo & Company MN boosted its holdings in shares of Domtar by 215.3% in the 4th quarter. Wells Fargo & Company MN now owns 279,785 shares of the basic materials company’s stock worth $13,855,000 after purchasing an additional 191,055 shares in the last quarter. Finally, Cornerstone Capital Management Holdings LLC. purchased a new position in shares of Domtar in the 3rd quarter worth about $6,984,000. Institutional investors and hedge funds own 90.59% of the company’s stock.
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Domtar Corporation designs, manufactures, markets and distributes a range of fiber-based products, including communication papers, specialty and packaging papers and absorbent hygiene products. The Company segments include Pulp and Paper and Personal Care. The Pulp and Paper segment consists of the design, manufacturing, marketing and distribution of communication, specialty and packaging papers, as well as softwood, fluff and hardwood market pulp.
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