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

Earnings results for Domtar (NYSE:UFS)

Domtar Corporation is expected* to report earnings on 11/06/2020 before market open. The report will be for the fiscal Quarter ending Sep 2020. According to Zacks Investment Research, based on 4 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 issued its earnings results on August 7th, 2020. The basic materials company reported $0.36 earnings per share for the quarter, beating analysts’ consensus estimates of ($0.48) by $0.84. The company earned $1.01 billion during the quarter, compared to the consensus estimate of $1.02 billion. Its revenue was down 23.2% on a year-over-year basis. Domtar has generated $3.00 earnings per share over the last year and currently has a price-to-earnings ratio of 164.3. Domtar has confirmed that its next quarterly earnings report will be published on Friday, November 6th, 2020.

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 13.01%. 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 13.0% from its current price of $26.28. 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 3.68%, 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 164.25, which means that it is trading at a more expensive P/E ratio than the market average P/E ratio of about 19.72. The P/E ratio of Domtar is 164.25, which means that it is trading at a more expensive P/E ratio than the Basic Materials sector average P/E ratio of about 39.55. Domtar has a P/B Ratio of 0.63. P/B Ratios below 1 indicate that a company could be undervalued with respect to its assets and liabilities.

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