Barclays on U.S. Paper & Packaging: FX; A Symptom Not A Diagnosis
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Price: $40.26 -1.18%
Rating Summary:
15 Buy, 4 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
15 Buy, 4 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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Barclays on U.S. Paper & Packaging: FX; A symptom not a diagnosis
Analyst, Scott L. Gaffner updated recent investor inquiries by saying, "The rising dollar versus Euro and Real could reduce 2012 Paper & Packaging EPS on average 3%, but this doesn't fully explain the nearly 10% drop in stock prices. We believe FX is principally a symptom of weaker economic growth, and not a diagnosis of the impact on stock prices. Furthermore, companies in our space with higher levels of exposure to Europe have seen their stock price decline 15%-20% despite an implied FX impact to EPS of around 5%."
Gaffner said investors should be concerned, but only as a 'Secondary Impact' to earnings. U.S. Paper and Packaging stocks are already down approx. 12%, although companies with high exposure to Europe are down even more. On the positive side, easy comparisons from last year, plus World Cup Soccer and the Olympics, should help reduce fears and create opportunity.
Stocks of Note: Int'l Paper (NYSE: IP), Orient Paper, Inc. (NYSE: ONP), Clearwater (NYSE: CLW) and PH Glatfelter (NYSE: GLT)
Analyst, Scott L. Gaffner updated recent investor inquiries by saying, "The rising dollar versus Euro and Real could reduce 2012 Paper & Packaging EPS on average 3%, but this doesn't fully explain the nearly 10% drop in stock prices. We believe FX is principally a symptom of weaker economic growth, and not a diagnosis of the impact on stock prices. Furthermore, companies in our space with higher levels of exposure to Europe have seen their stock price decline 15%-20% despite an implied FX impact to EPS of around 5%."
Gaffner said investors should be concerned, but only as a 'Secondary Impact' to earnings. U.S. Paper and Packaging stocks are already down approx. 12%, although companies with high exposure to Europe are down even more. On the positive side, easy comparisons from last year, plus World Cup Soccer and the Olympics, should help reduce fears and create opportunity.
Stocks of Note: Int'l Paper (NYSE: IP), Orient Paper, Inc. (NYSE: ONP), Clearwater (NYSE: CLW) and PH Glatfelter (NYSE: GLT)
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