UPDATE: Goldman Sachs Starts Domtar (UFS) at Neutral
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(Updated - September 22, 2016 9:16 AM EDT)
Goldman Sachs initiated coverage on Domtar (NYSE: UFS) with a Neutral rating and a price target of $40. Analyst Brian Maguire is negative on the near-term outlook for Pulp.
"We believe that UFS’s current coverage-low multiple of 5.1x 2016E EBITDA fairly reflects its challenges competing with better-capitalized, stronger brands in Personal Care, the well known secular decline in Uncoated Freesheet (UCFS), and near-term pricing headwinds in pulp. While Personal Care has recently had some important wins that should accelerate top line growth, we are less confident about management’s medium-term profitability goals (mid-teens margins) for the business. Furthermore, our negative view on the pulp markets offsets our positive view (relative to consensus) on UCFS," said the analyst.
Shares of Domtar closed at $36.66 yesterday.
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