SLVM Should I Buy
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Sylvamo Corp (SLVM) is not a strong buy at the moment for a long-term beginner investor. While the technical indicators show bullish momentum, the overbought RSI and declining financial performance, coupled with weak market demand and ongoing margin pressures, suggest caution. The absence of strong proprietary trading signals and mixed analyst sentiment further supports a hold recommendation.
The MACD is positive and expanding, indicating bullish momentum. The RSI is at 81.129, signaling an overbought condition. Moving averages are bullish (SMA_5 > SMA_20 > SMA_200). Key resistance levels are at 55.248 and 57.659, while support levels are at 47.444 and 45.033. The pre-market price is $53.6, down 2.08%, reflecting a potential pullback.
The company exceeded Q4 EPS expectations by $0.02, demonstrating strong cash flow management with a 14% EBITDA margin. Capital spending for 2026 is focused on long-term value creation, particularly with the Eastover mill investment.
Revenue declined 8.2% YoY in Q4, with net income dropping to $0 and EPS falling by 56.99% YoY. Management highlighted ongoing margin compression and high wood costs in Europe, alongside a $95 million negative EBITDA impact expected in North America. The company discontinued quarterly adjusted EBITDA guidance, which may deter some investors.
In Q4 2025, revenue dropped to $890 million (-8.25% YoY), net income fell to $0 (-100% YoY), EPS declined to $0.83 (-56.99% YoY), and gross margin decreased to 17.42 (-13.81% YoY). These figures reflect significant financial challenges.
Analysts are mixed on Sylvamo. BofA maintains a Buy rating but lowered the price target from $59 to $57. RBC Capital raised the price target to $53 but maintains a Sector Perform rating, citing tepid demand conditions in the forest products sector.
