Zacks Investment Research downgraded PH Glatfelter Co. GLT to a Zacks Rank #5 (Strong Sell) on Jul 4, 2015. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of performing worse than the broader market.
Why the Downgrade?
Market sentiments have been weak for PH Glatfelter since the beginning of 2015, with the share price falling 12.6% ever since. Also, the company’s first-quarter 2015 results failed to infuse the much-needed optimism among investors. A brief snapshot of the quarterly results will justify the resentment among shareholders.
PH Glatfelter’s earnings of 30 cents per share for the first quarter came in below the year-ago tally of 32 cents. Revenues declined 8.4% year over year, severely hit by unfavorable foreign currency movements. Also, operating income decreased 23.9% year over year, with the margin falling 130 basis points to 10.8%.
In second-quarter 2015, PH Glatfelter expects to complete its planned outages, by reducing operating profit by a pre-tax expense of $34 million. Also, shipping volumes for the Specialty Papers segment are predicted to decline sequentially. Taking into account these headwinds, the earnings estimates on the stock were revised downward.
Over the last 60 days, the Zacks Consensus Estimate for PH Glatfelter has fell 8.4% to $1.63 per share for 2015 and 5.8% to $2.13 for 2016.
Stocks to Consider
PH Glatfelter currently has a market capitalization of $956 million. Better-ranked stocks in the paper and related products industry include Rexam PLC REXMY, Fibria Celulose SA FBR and Sappi Limited SPPJY. While Rexam PLC sports a Zacks Rank #1 (Strong Buy), both Fibria Celulose and Sappi Limited carry a Zacks Rank #2 (Buy).
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