CLW Should I Buy
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Clearwater Paper Corp (CLW) is not a strong buy for a beginner investor with a long-term focus at this time. The stock exhibits bearish technical indicators, weak financial performance, and insider selling activity, which outweighs any potential positive catalysts. Given the lack of recent positive news, no significant trading trends, and poor earnings performance, it is better to hold off on investing in this stock until clearer signs of recovery or growth emerge.
The technical indicators for CLW are bearish. The MACD is negatively expanding, the RSI is neutral at 41.187, and the moving averages show a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading below its pivot level of 17.672, with key support at 16.671 and resistance at 18.673.
The company is exploring capacity additions in Coated Unbleached Kraft and Coated Recycled Boxboard, which could diversify its offerings. Additionally, low leverage and potential acquisition interest could be future catalysts.
Insider selling has increased significantly by 494.02% over the last month, which indicates a lack of confidence from insiders. The company's financial performance has been weak, with a significant drop in net income (-1018.97% YoY) and EPS (-1042.86% YoY). Gross margin also declined by 38.69% YoY. There is no recent positive news or significant trading trends to support the stock.
In Q3 2025, revenue increased by 1.45% YoY to $399 million. However, net income dropped drastically to -$53.3 million (-1018.97% YoY), EPS fell to -3.3 (-1042.86% YoY), and gross margin declined to 4.69 (-38.69% YoY). Overall, the financial performance is weak and shows a concerning downward trend.
Truist initiated coverage with a Hold rating and a $21 price target. Analysts highlight the company's potential benefits from European capacity rationalization and U.S. supply shifts, but the Hold rating reflects a cautious outlook given current challenges.
