Rayonier Advanced Materials Inc.

Rayonier Advanced Materials Inc. (NYSE: RYAM) is a company that produces high-purity cellulose from wood. The company's products, also known as cellulose specialty, are utilized in several applications such as cigarette filters, liquid crystal displays, paints, pharmaceuticals, and food.

Key Highlights

• The company reported a 15.62% increase in net sales to USD 374.01 million in Q3FY21 (ended September 25, 2021) compared to USD 323.48 million in Q3FY20.
• In addition, RYAM incurred a net loss of USD 4.76 million in Q3FY21 vs. a net income of USD 28.86 million in Q3FY20.
• The company had USD 279.16 million in cash and cash equivalents as of September 30, 2021, and USD 946.52 million in total debt, indicating a highly leveraged balance sheet.
• RYAM reported a gross margin of 5.2% in Q3FY21 compared to an industry mean of 33.0%.
• The company completed the previously announced sale of its lumber and newsprint facilities and some connected assets in Ontario and Québec, Canada, on August 28, 2021.
• Stock is currently trading below its crucial short-term (50-day) and long-term (200-day) DMA support levels, indicating a bearish trend.
• Stock is leaning towards the lower band of the 52-week range of USD 4.98 to USD 11.30.
• RYAM stock price has declined 20.29% and 37.55% in the past three and nine months.

Technical Price Chart (as of January 05, 2022). Analysis by Kalkine

Conclusion: Considering the volatility in global lumber prices, macroeconomic conditions, thinly margins, leveraged balance sheet, and technical indicators, we recommend a "Avoid" rating on the stock at the closing price of USD 5.97, up  0.84% as of January 05, 2022.

*The reference data in this report has been partly sourced from REFINITIV.