Back to top

Analyst Blog

Stock to Avoid: PH Glatfelter

 ZacksTrade Now

Zacks Investment Research downgraded PH Glatfelter Co. to a Zacks Rank #5 (Strong Sell) on Apr 9, 2014. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of underperforming the broader market.

Why the Downgrade?

PH Glatfelter’s fourth-quarter 2013 results failed to impress its shareholders and as such its share price fell nearly 7.2% on Feb 13. To date, the company has not been able to regain its momentum with its share price still down by 14.5% since the earnings release.

A snapshot of PH Glatfelter's results and outlook is provided below:

Adjusted earnings per share were 34 cents, lagging the Zacks Consensus Estimate of 56 cents. However, bottom-line results surpassed the year-ago earnings of 26 cents. Revenues in the quarter increased 1.1% year over year to $435 million on the back of healthy performances in the Composite Fibers and Advanced Airlaid Materials segments. However, the Specialty Papers segment reported weak results. Cost of sales increased 11.9%, while gross margins plummeted 90 basis points.

In the last 60 days, the Zacks Consensus Estimate for PH Glatfelter has decreased 14.2% to $1.87 for 2014 and by 5.0% to $2.47 for 2015. Lowered earnings estimates as well as a negative average earnings surprise of 1.7% have made us dubious about the company’s performance in the quarters ahead. Currently, the company has an Earnings ESP of -16.67% for first-quarter 2014 and -3.74% for full-year 2014.
 
Other Stocks to Consider

PH Glatfelter presently has a market capitalization of $1.15 billion. Other stocks to watch out for in the industry include Domtar Corporation , KapStone Paper and Packaging Corporation and Neenah Paper, Inc. , all of which hold a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on NP
Read the Full Research Report on UFS
Read the Full Research Report on KS
Read the Full Research Report on GLT


Zacks Investment Research

Please login to Zacks.com or register to post a comment.