Does Earnings Surprise History Hold Any Clue for Domtar (NYSE:UFS)

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Earnings results for Domtar (NYSE:UFS)

Domtar Corporation is estimated to report earnings on 10/23/2020. The upcoming earnings date is derived from an algorithm based on a company’s historical reporting dates. Our vendor, Zacks Investment Research, might revise this date in the future, once the company announces the actual earnings date. According to Zacks Investment Research, based on 0 analysts’ forecasts, the consensus EPS forecast for the quarter is $-0.28. The reported EPS for the same quarter last year was $0.89.

Domtar last released its earnings data on August 7th, 2020. The basic materials company reported $0.36 earnings per share for the quarter, topping analysts’ consensus estimates of ($0.48) by $0.84. The company earned $1.01 billion during the quarter, compared to analyst estimates of $1.02 billion. Its revenue for the quarter was down 23.2% compared to the same quarter last year. Domtar has generated $3.00 earnings per share over the last year and currently has a price-to-earnings ratio of 169.1. Domtar has not formally confirmed its next earnings publication date, but the company’s estimated earnings date is Friday, October 23rd, 2020 based off prior year’s report dates.

Analyst Opinion on Domtar (NYSE:UFS)

10 Wall Street analysts have issued ratings and price targets for Domtar in the last 12 months. Their average twelve-month price target is $29.70, predicting that the stock has a possible upside of 9.80%. The high price target for UFS is $42.00 and the low price target for UFS is $22.00. There are currently 3 sell ratings, 5 hold ratings and 2 buy ratings for the stock, resulting in a consensus rating of “Hold.”

Domtar has received a consensus rating of Hold. The company’s average rating score is 1.90, and is based on 2 buy ratings, 5 hold ratings, and 3 sell ratings. According to analysts’ consensus price target of $29.70, Domtar has a forecasted upside of 9.8% from its current price of $27.05. Domtar has been the subject of 6 research reports in the past 90 days, demonstrating strong analyst interest in this stock.

Dividend Strength: Domtar (NYSE:UFS)

Domtar pays a meaningful dividend of 3.35%, higher than the bottom 25% of all stocks that pay dividends. Domtar does not have a long track record of dividend growth. The dividend payout ratio of Domtar is 30.33%. This payout ratio is at a healthy, sustainable level, below 75%. Based on EPS estimates, Domtar will have a dividend payout ratio of 104.60% in the coming year. This indicates that Domtar may not be able to sustain their current dividend.

Insiders buying/selling: Domtar (NYSE:UFS)

In the past three months, Domtar insiders have not sold or bought any company stock. Only 1.37% of the stock of Domtar is held by insiders. 91.53% of the stock of Domtar is held by institutions. High institutional ownership can be a signal of strong market trust in this company.

Earnings and Valuation of Domtar (NYSE:UFS

Earnings for Domtar are expected to grow by 278.26% in the coming year, from $0.23 to $0.87 per share. The P/E ratio of Domtar is 169.06, which means that it is trading at a more expensive P/E ratio than the market average P/E ratio of about 19.48. The P/E ratio of Domtar is 169.06, which means that it is trading at a more expensive P/E ratio than the Basic Materials sector average P/E ratio of about 38.58. Domtar has a P/B Ratio of 0.65. P/B Ratios below 1 indicate that a company could be undervalued with respect to its assets and liabilities.

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