Jefferies Adjusts Smurfit Westrock's Price Target to $54 From $53

Rayonier Advanced Materials RYAM is expected to report improvements in its top and bottom lines when it reports fourth-quarter 2024 results later this month.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The Zacks Consensus Estimate for RYAM’s fourth-quarter revenues is pegged at $436 million, indicating 3.3% growth from the year-ago reported figure. The Zacks Consensus Estimate for the bottom line has been unchanged in the past 60 days at a loss of 12 cents per share, suggesting an improvement from the loss of 22 cents incurred in the fourth quarter of 2023.

RYAM’s Earnings Surprise History

Rayonier Advanced Materials’ earnings beat the Zacks Consensus Estimates in two of the trailing four quarters and missed on two occasions, the average surprise being 9.52%.

What the Zacks Model Unveils for Rayonier Advanced Materials

Our proven model does not conclusively predict an earnings beat for RYAM this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here, as you can see below.

You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Earnings ESP: Rayonier Advanced Materials has an Earnings ESP of 0.00% at present.

Zacks Rank: The company currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Have Shaped RYAM’s Q4 Performance

Earlier this month, Rayonier Advanced Materials provided an update on preliminary 2024 financial results. This may show how it is likely to have fared in the to-be-reported quarter.

RYAM’s net sales dipped 0.2% to $1.639 billion in 2024. Taking into account the $1.208 billion in sales generated in the first three quarters of 2024, sales are suggested to be $431 million for the fourth quarter of 2024. This indicates 2% year-over-year growth from sales of $422 million reported in the fourth quarter of 2023.

Rayonier Advanced Materials reported a loss from continuing operations of $43 million in 2024, an improvement from the loss of $102 million incurred in the prior year. Adjusting for the loss of $26 million incurred in the first three quarters of 2024, the loss is anticipated to be $17 million for the fourth quarter of 2024, suggesting a narrower figure than the loss of $61 million incurred in the year-ago quarter.

Adjusted EBITDA for 2024 was $222 million, up 60% year over year and higher than the company’s guidance of $205-$215 million for the year. This implies an adjusted EBITDA of $51 million for the fourth quarter of 2024, suggesting a 38% increase from the prior-year quarter’s actual.

The company has been improving its product mix and managing operating costs, delivering improved results. Average sales prices for cellulose specialties were expected to be higher as the company has been prioritizing value over volume. Sales volumes for cellulose specialties are expected to have grown, driven by increased volumes from the closure of a competitor’s plant, a modest rise in ethers demand and additional volume sold to customers affected by the indefinite suspension of Temiscaming HPC operations.

Lower paperboard prices in the fourth quarter are expected to have been offset by increased sales volumes. High-yield-pulp prices are expected to have been down, while shipments are anticipated to have been higher due to the timing of shipments.

On Oct. 11, there had been an isolated fire at the company’s plant in Jesup, GA, and the plant was operational in less than two weeks. The company anticipated this to impact earnings by $10 million.

Rayonier Advanced Materials Stock's Price Performance

RYAM shares have surged 60% in the past year compared with the industry's 40.1% growth.

Earnings Performance of RYAM’s Peers

Smurfit Westrock Plc SW reported earnings of 28 cents per share in fourth-quarter 2024 compared with 19 cents in the year-ago quarter. Adjusted for non-recurring costs, earnings were 34 cents, which missed the Zacks Consensus Estimate of earnings of 68 cents.

Smurfit Westrock’s net sales skyrocketed 163.4% year over year to $7.54 billion, aided by the positive impacts of acquisitions and growth in corrugated volumes. The top line lagged the Zacks Consensus Estimate of $7.80 billion.

International Paper Company IP reported an adjusted loss of two cents per share in the fourth quarter of 2024, which beat the Zacks Consensus Estimate of a loss of 7 cents per share. This compares with the company’s restated adjusted loss of 51 cents per share for the year-ago quarter.

International Paper witnessed lower volumes, higher input, and operation and maintenance outage costs, which were offset by an improved price mix. Earnings in the quarter also included a benefit of 46 cents from accelerated depreciation related to strategic mill actions.

International Paper reported net sales of $4.58 billion, down 0.5% from the year-ago quarter, as lower volumes were offset by higher prices. The top line missed the Zacks Consensus Estimate of $4.7 billion.

Stock That Warrants a Look

Here is a company in the basic materials space, which, according to our model, has the right combination of elements to post an earnings beat this reporting cycle.

Newmont NEM, ready to release fourth-quarter earnings on Feb. 20, currently has an Earnings ESP of +6.44% and a Zacks Rank of 3.

The Zacks Consensus Estimate for NEM’s fourth-quarter 2024 earnings is pegged at 95 cents per share, indicating a 90% surge from the year-ago quarter. Newmont has a trailing four-quarter average earnings surprise of 22.16%.

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