SLVM – 1Q26 Review: Miss on One-Offs; Positioned for Strong EBITDA Rebound in 2027; Portfolio Review c/b Supportive

研报英文原文证据摘录

SLVM – 1Q26 Review: Miss on One-Offs; Positioned for Strong EBITDA Rebound in 2027; Portfolio Review c/b Supportive

Truist Securities

Company Description

Sylvamo Corporation (SLVM) is the second largest producer of uncoated freesheet (UCFS) including cutsize and offset paper in North

America, third largest producer in Europe, and largest in Latin America with global paper capacity of ~2.8mn tons (excluding offtake

agreements with International Paper) and market pulp capacity of ~410k tons. The company also owns ~250k acres (~110k hectares) of

forestland in Brazil. SLVM was previously part of IP and became a separate, publicly traded company on October 1, 2021.

Investment Thesis

We rate SLVM Buy given its favorable global cost position, which is important as UCFS is in secular decline in many key markets due

to electronic media, corporate productivity initiatives, and the transition of workplaces to paperless environments. Over time, the North

America UCFS market, where SLVM has a 21% market share, has consolidated resulting in better supply management, disciplined

capacity rationalization, and generally stable-to higher-pricing. As a highly integrated UCFS producer, SLVM is well-positioned in Europe as

currently rising pulp prices steepen the UCFS cost curve, making it more challenging for non-integrated producers to compete. Meanwhile,

in Brazil, the company’s eucalyptus plantations afford a unique competitive advantage as they provide sustainable, low-cost, high-quality

fiber to its integrated mills, giving it direct control and a favorable fiber cost position. In addition, SLVM has an attractive valuation, trading

below historical UCFS trading and M&A multiples.

Valuation and Risks