Domtar Corp (UFS) stock started the new week with positivity. UFS share gained 2.79% in the normal trading session on Monday, May 3, 2021, to close at $1.10 per share. it continued its momentum in the after-market session and further gained 16.36% to close at $47.15 per share.
UFS shares have risen by 79.77% over the last 12 months, and they have moved up by 2.09% in the past week. Over the past three months, the stock has gained 31.39%, while over the past six months, it has added 69.54%.
Let’s try to find out is there any reason behind its recent surge on Monday?
Earnings speculations on upcoming quarterly financial results
Domtar Corp (UFS) is expected to announce the Q1 2021 financial figures on May 6 and analysts are expecting earning growths with low revenue.
UFS shares can rise further if key numbers top expectations in the upcoming earnings report and they may go down if they miss the estimates.
According to Zacks estimates, Domtar Corp is expected to post quarterly earnings of $0.51 per share in its upcoming report, which represents a year-over-year change of +466.7%.
Zack is predicting revenue of $930 million, down 27.2% compared to the same quarter in 2020.
Domtar’s retained Baa3 senior unsecured rating
Moody’saffirmed Domtar Corporation’s senior unsecured bond rating at Baa3. The outlook also remains stable according to Moody.
The rating reflects Domtar’s excellent liquidity and strong balance sheet numbers.
Redemption of 2022 Notes
On March 9, 2021, Domtar Corporation elected to redeem $300 million in aggregate principal amount of its 4.40% Notes due 2022, representing all of the notes outstanding.
Repurchasingcommon stock shares
On March 2, 2021, Domtar Corporation signed an agreement with JPMorgan Chase Bank, N.A. to repurchase $200 million of its common stock with available cash on hand.
According to the agreement, UFS will pay $200 million in exchange for an initial delivery of 4,430,906 shares.
Personal care business sales completion
On March 1, 2021, Domtar Corporation completed the previously disclosed sale of its Personal Care business to affiliates of American Industrial Partners for $920 million, which will accelerate the company’s strategic transformation to become a leading paper, pulp, and packaging company.
New management committee appointments
On February 23, 2021, Domtar Corporation’sboard of directors appointed the following leaders to the management committee.
- Maria Brennan has been appointed to the role of senior vice president, procurement.
- James (Bill) Edwards has been appointed to the role of senior vice president, pulp and paper operations.
- Steven Henry has been appointed to the role of senior vice president, packaging.
- Stephen Makris has been appointed to the role of senior vice president, business transformation.
- Robert Melton has been appointed to the role of senior vice president, pulp and paper commercial.
Investors are hopeful for a better Q1 financial results announcement on May 6 which could be the reason behind its gains on Monday. If UFS announces good results as predicted, we can expect it to surge significantly in the coming days.