Suzano S.A. (NYSE: SUZ)

Sector: Basic Materials Industry: Paper & Paper Products CIK: 0000909327
Market Cap 13.57 Bn
P/B 1.70
P/E 5.54
P/S 1.48
ROIC (Qtr) 35.43
Div Yield % 0.00
Rev 1y % (Qtr) 4.32
Total Debt (Qtr) 18.56 Bn
Debt/Equity (Qtr) 2.32
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About

Suzano S.A., a Brazilian company listed on the New York Stock Exchange (NYSE) under the ticker symbol SUZ, is a leading producer of pulp and paper products with a presence in over 50 countries worldwide. The company operates primarily in the pulp and paper industry, with business activities centered on the production of pulp and paper products such as market pulp, paperboard, tissue paper, and fluff pulp. Suzano's revenue generation comes primarily from the sale of its products to customers in both domestic and export markets. In 2023, the company...

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Investment thesis

Bull case

  • Healthy cash reserves of 2.77B provide 3.93x coverage of short-term debt 704.88M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 3.31B provides exceptional 615.37x coverage of minority interest expenses 5.38M, showing strong core operations.
  • Strong operating cash flow of 3.31B provides 2.97x coverage of SG&A expenses 1.11B, showing efficient operational cost management.
  • Short-term investments of 1.81B provide solid 2.08x coverage of other current liabilities 870.21M, indicating strong liquidity.
  • Tangible assets of 28.28B provide robust 32.50x coverage of other current liabilities 870.21M, indicating strong asset backing.

Bear case

  • Operating cash flow of 3.31B barely covers its investment activities of (1.79B), with a coverage ratio of -1.85, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 2.77B provide limited coverage of acquisition spending of (58.76M), which is -47.14x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 1.04B provides weak coverage of capital expenditures of 2.27B, with a 0.46 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of 3.31B barely covers operating expenses of (170.61M) with a -19.42 ratio, suggesting thin operational efficiency margins and limited flexibility.
  • Operating earnings of 4.98B show weak coverage of depreciation charges of 2.06B, with a 2.41 ratio indicating high capital intensity and potential reinvestment needs.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Paper & Paper Products
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SUZ Suzano S.A. 13.57 Bn 5.54 1.48 18.56 Bn
2 SLVM Sylvamo Corp 2.07 Bn 17.58 0.57 0.81 Bn
3 MAGN Magnera Corp 0.49 Bn -3.69 0.15 1.98 Bn
4 CLW Clearwater Paper Corp 0.28 Bn 1.98 0.18 0.34 Bn
5 MERC Mercer International Inc. 0.14 Bn -0.28 0.07 1.61 Bn
6 ITP It Tech Packaging, Inc. 0.00 Bn -0.21 0.03 0.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.22 0.52
EV to Cash from Ops. EV/CFO 2.04 31.57
EV to Debt EV to Debt 0.36 1.42
EV to EBIT EV/EBIT 1.36 14.32
EV to EBITDA EV/EBITDA 1.66 5.50
EV to Free Cash Flow [EV/FCF] EV/FCF 6.50 2.55
EV to Market Cap EV to Market Cap 0.50 3.68
EV to Revenue EV/Rev 0.74 0.59
Price to Book Value [P/B] P/B 1.70 1.28
Price to Earnings [P/E] P/E 5.54 3.49
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -7.86
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 6.42
Dividend per Basic Share Div per Share (Qtr) 0.00 0.33
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 9.15
Interest Coverage Int. cover (Qtr) 3.96 0.06
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 14.19 14.26
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 89.81 21.24
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -5.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 594.48 -165.64
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 1.13 132.21
EBIT Growth (1y) % EBIT 1y % (Qtr) 504.65 -132.43
EBT Growth (1y) % EBT 1y % (Qtr) 274.92 853.95
EPS Growth (1y) % EPS 1y % (Qtr) 318.61 120.07
FCF Growth (1y) % FCF 1y % (Qtr) 51.63 -94.28
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -8.51 -21.66
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.05 0.76
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.04
Cash Ratio Cash Ratio (Qtr) 1.10 0.50
Current Ratio Curr Ratio (Qtr) 3.19 2.37
Debt to Equity Ratio Debt/Equity (Qtr) 2.32 4.86
Interest Cover Ratio Int Coverage (Qtr) 3.96 0.06
Times Interest Earned Times Interest Earned (Qtr) 3.96 0.06
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 76.90 17.55
EBIT Margin % EBIT Margin % (Qtr) 298.14 47.08
EBT Margin % EBT Margin % (Qtr) 40.67 1.88
Gross Margin % Gross Margin % (Qtr) 32.40 12.55
Net Profit Margin % Net Margin % (Qtr) 26.80 -0.58