Resolute Forest Products Inc. (RFP): What the Financials Tell Us

Resolute Forest Products Inc. (NYSE:RFP) saw an upside of 7.95% to close Monday at $13.99 after adding $1.03 on the day. The 5-day average trading volume is 559,740 shares of the company’s common stock. It has gained $14.40 in the past week. An average of 677,840 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 564,874.

RFP’s 1-month performance is 16.58% or $1.99 on its low of $9.84 reached on 09/20/21. The company’s shares have touched a 52-week low of $4.04 and high of $16.36, with the stock’s rally to the 52-week high happening on 05/27/21. YTD, RFP has achieved 130.80% or $7.45. However, the current price is down -14.48%% from the 52-week high price.

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Insider Transactions

On Jun 16, 118 days have gone by since the last insider trading activity for Resolute Forest Products Inc. (RFP). Ouellet Daniel (SVP Human Resources) most recently sold 5,000 shares at $13.51 per share on Jun 16. This transaction cost the insider $67,550. Senior Vice President & CLO, VACHON JACQUES P, sold 15,377 shares at a price of $15.91 on May 07. Then, on Feb 16, Chief Executive Officer LAFLAMME YVES sold 22,952 shares at a price of $10.51 per share. This transaction amounted to $241,226.

Valuation Metrics

The company’s PE ratio for the last five years has touched a high of 119.67 and a low of 1.813. RFP stock has a beta of 3.25. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 0.30 while the price-to-book (PB) in the most recent quarter is 0.80, with the price to cash flow ratio at 1.63.

Resolute Forest Products Inc.’s quick ratio for the period ended June 29 was 1.10, with the current ratio over the same period at 2.00 meaning that RFP stock is able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 0.22, while the total debt to equity was 0.22. In terms of profitability, the gross margin trailing 12 months is 39.90%. The trailing 12-month EBITDA margin is 11.07% while for the period ending June 29; Resolute Forest Products Inc.’s operating margin was 19.60%. The firm’s gross profit as reported stood at $790.0 million against revenue of $2.8 billion.

Earnings Surprise

For the quarterly period ending June 29 this year, Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 39.56% to $1.14 billion, while revenue of $873.0 million was 23.42% off the previous quarter. Analysts expected RFP to announce $3.39 per share in earnings in its latest quarter, but it posted $3.74, representing a 10.30% surprise. EBITDA for the quarter stood at more than $446.0 million. RFP stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 2.44 billion, with total debt at $362.0 million. Shareholders hold equity totaling $79.11 million

Technical Picture

Let’s look briefly at Resolute Forest Products Inc. (RFP) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 11 October was 80.41% to suggest the stock is trending Overbought, with historical volatility in this time period at 46.94%.

The stock’s 5-day moving average is $12.69, reflecting a +17.27% or $2.06 change from its current price. RFP is currently trading +27.53% above its 20-day SMA, -7.78% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by +17.17% and +123.84% respectively.

Stochastic %K and %D was 93.54% and 92.16% and the average true range (ATR) pointed at 0.60. The RSI (14) points at 72.65%, while the 14-day stochastic is at 88.29% with the period’s ATR at 0.57. The stock’s 9-day MACD Oscillator is pointing at 0.69 and 0.91 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Resolute Forest Products Inc. (NYSE: RFP), Scotiabank upgraded it to a Sector perform rating. They previously had a Sector underperform rating on the stock. Analysts offering their rating for RFP stock have a consensus rating for the stock as Overweight. Currently, 0 brokerage advisors rate RFP as a “sell,”, while 1 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 0 rates the stock as overweight while 3 have offered a “buy” rating.

What is RFP’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $15.00 and a high of $19.00, with their median price target at $17.00. Looking at these predictions, the average price target given by analysts is for Resolute Forest Products Inc. (RFP) stock is $17.00.


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