CLW - Embedded Expectations Analysis - 2020 04 03
ï€ Clearwater Paper Corporation (CLW:USA) currently trades at a discount relative to UAFRS-based (Uniform) assets, with a 0.5x Uniform P/B. At these levels, the market is pricing in muted expectations for the firm, and management may be concerned about EBITDA growth, market absorption, and their 2020 outlookï€ Specifically, they are confident that price mix and volume will serve as a $25mn-$30mn EBITDA headwind in 2020. In addition, they may lack confidence in their ability to realize $25mn-$35mn of expected EBITDA benefit from their Lewiston facility project, sustain EBITDA growth in their pulp and paperboard segment, and expand their foodservice footprint with NuVo CupStock paperboard. Moreover, they may have concerns about incremental net losses and about absorption of new capacity in the tissue market. Furthermore, they may be exaggerating tailwinds related to their 2020 outlook and demand from the foodservice industry for boxboards
Clearwater Paper manufactures consumer tissue, away-from-home tissue (AFH), parent roll tissue, bleached paperboard and pulp. The company is a supplier of private label tissue to retailers and wholesale distributors. In addition, the company produces bleached paperboard and provides services that include custom sheeting, slitting and cutting. The company's segments are: Consumer Products, which manufactures and sells a complete line of at-home tissue products as well as AFH products; and Pulp and Paperboard, which consists primarily of folding carton, liquid packaging, cup and plate products, blister and carded packaging, top sheet, commercial printing grades and hardwood and softwood pulp.
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