Sylvamo stock price target lowered to $44 by BofA on paper market challenges

Investing.com - BofA Securities has lowered its price target on Sylvamo Corp. (NYSE:SLVM) to $44.00 from $64.00 while maintaining an Underperform rating on the paper manufacturer’s stock. The stock, currently trading at $40.40, has declined 36.8% over the past six months, though InvestingPro analysis suggests the company is undervalued based on its Fair Value model.

The firm cited challenges in the paper and pulp sector along with broader economic headwinds that have impacted Sylvamo’s fundamentals and earnings power. Despite these challenges, the company maintains a strong financial health score of 3.12 (rated "GREAT" by InvestingPro). BofA estimates that North American volumes declined approximately 6% excluding the impact from the Georgetown mill closure, partly due to imports flooding the market ahead of trade restrictions.

The analysis noted that import pressures primarily affected offset and converting paper grades rather than cut-size products. Meanwhile, Mexico’s economic slowdown has reduced its demand for paper imports, creating additional market pressure.

BofA observed that producers have redirected excess volume to Other Latin American markets (excluding Brazil), as well as to the Middle East, Africa, and Europe, further disrupting market balance.

These combined factors are expected to weigh on market trends into the third quarter and potentially longer, according to the BofA Securities assessment. The company currently trades at a P/E ratio of 6.85, with analysts recently revising earnings estimates downward. For deeper insights into Sylvamo’s valuation and prospects, check out the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Sylvamo Corporation reported its second-quarter 2025 financial results, which fell short of expectations. The company’s adjusted earnings per share (EPS) were reported at $0.37, missing the anticipated $0.48 by a notable margin, resulting in a negative surprise of 22.92%. Additionally, revenue figures were below forecasts, with the company generating $794 million compared to the expected $831.74 million, marking a shortfall of 4.54%. These results have drawn significant attention from investors and analysts alike. Following the earnings announcement, Sylvamo’s stock experienced a sharp decline. While the company navigates these recent financial challenges, analysts and investors will be closely monitoring its next steps.

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