Key Takeaways VLO's Diamond Green Diesel venture has expanded renewable fuel capacity to about 1.2 billion gallons annually.Valero's Port Arthur project can convert up to 235 million gallons of renewable diesel into SAF each year.Valero operates 12 ethanol plants with annual production capacity of 1.7 billion gallons. As governments and consumers place greater emphasis on reducing emissions and improving air quality, demand for cleaner transportation fuels is expected to grow. To address the growing demand for cleaner fuels and meet low-carbon fuel standards, Valero Energy Corporation (VLO - Free Report) is expanding its low-carbon fuels business through renewable diesel, sustainable aviation fuel (SAF) and ethanol, creating a diversified platform beyond traditional refining.
Valero's low-carbon fuels portfolio is anchored by its Diamond Green Diesel (DGD) joint venture, which has increased renewable fuel production capacity from 160 million gallons per year in 2013 to approximately 1.2 billion gallons per year in first-quarter 2026. Since its inception, DGD has generated more than $3 billion in cumulative EBITDA. Renewable diesel is particularly attractive because it can reduce greenhouse gas emissions by up to 80% while remaining compatible with existing fuel infrastructure.
Valero strengthened its sustainable aviation fuel (SAF) capacity through the Port Arthur project, which can convert up to 235 million gallons of renewable diesel into SAF annually. The project enables airlines to meet strict emission requirements while providing an attractive return that surpasses the company's 25% after-tax internal rate of return threshold.
The refiner operates 12 ethanol plants producing 1.7 billion gallons of ethanol annually, benefiting from low-cost operations, export opportunities and lower-carbon incentives. Together, renewable diesel, SAF and ethanol support long-term cash flow growth and enhance VLO’s ability to capitalize on the growing demand for cleaner transportation fuels.
Are BP & CVX Focused on Reducing Emissions?BP plc (BP - Free Report) and Chevron Corporation (CVX - Free Report) are actively implementing strategies aimed at minimizing emissions and improving overall air quality.
BP has developed a diversified renewable energy portfolio across solar, wind and bioenergy through strategic partnerships that enhance growth while limiting capital requirements. BP has also strengthened its presence in renewable natural gas through Archaea Energy, positioning it to benefit from rising demand for lower-carbon fuels.
Chevron is actively cutting emissions by scaling up the production of renewable fuels such as biodiesel, hydrogen and renewable natural gas. To further minimize its carbon footprint, CVX is simultaneously advancing carbon capture, utilization and storage technologies to safely trap carbon dioxide underground.
VLO’s Price Performance, Valuation & EstimatesValero shares have gained 101.6% over the past year compared with the 60.1% improvement of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, VLO trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 7.87X. This is above the broader industry average of 5.95X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for VLO’s 2026 earnings has remained unchanged over the past seven days.
Image Source: Zacks Investment Research
Valero currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Takeaways Fragile Iran war ceasefire keeps markets volatile; low-beta stocks stand out: LQDA, CVX, OXY, VLO.LQDA sees rapid YUTREPIA adoption, rising referrals and prescribers, and positive cash flow.VLO runs 3MM bpd capacity and has lower-carbon fuels exposure: SAF, renewable diesel and ethanol. Escalating tensions in the Middle East, as reflected in the Iran war, are now in a fragile ceasefire, creating significant uncertainty and making the U.S. stock market highly volatile. With fears dominating the market, it is ideal for investors to increase their allocation to low-beta stocks. Stocks that may attract investors' attention are Liquidia Corporation (LQDA - Free Report) , Chevron Corporation (CVX - Free Report) , Occidental (OXY - Free Report) and Valero Energy Corporation (VLO - Free Report) .
What Does Beta of a Stock Measure?Beta measures the volatility or risk of a particular asset compared to the market. In other words, beta measures the extent of a security’s price movement relative to the market. In this article, we are considering the S&P 500 as the market.
If a stock has a beta of 1, then the price of the stock will move with the market. So, the stock is more volatile than the market if its beta is more than 1. In the same way, the stock is not as volatile as the market if its beta is less than 1.
For example, if the market offers a return of 20%, a stock with a beta of 3 will return 60%, which is overwhelming. Similarly, when the market slips 20%, the stock will sink 60%, which is devastating.
Screening Criteria Using Research Wizard:We have taken a beta between 0 and 0.6 as our prime criterion for screening stocks that are less volatile than the market. However, this should not be the only factor to be considered while selecting a winning strategy. We need to take into account other parameters that can add value to the portfolio.
Percentage Change in Price in the Last 4 Weeks Greater Than Zero: This ensures that the stocks saw positive price movement over the last month.
Average 20-Day Volume Greater Than 50,000: A substantial trading volume ensures that the stocks are easily tradable.
Price Greater Than or Equal to $5: They must all be trading at a minimum of $5 or higher.
Zacks Rank Equal to 1 (Strong Buy): Zacks Rank #1 stocks indicate that they will significantly outperform the broader U.S. equity market over the next one to three months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are four of the 19 stocks that qualified for the screening:
Liquidia
Liquidia is experiencing rapid growth in YUTREPIA adoption, with increasing patient referrals, expanding prescriber base and rising market share. The company has achieved profitability and is generating positive cash flow, supported by a strong cash position. It is also pursuing expansion into additional indications and larger market opportunities through ongoing and planned clinical developments.
Chevron
Chevron has a strong footprint in the Permian basin. CVX mentioned that it has an interest in one of every five wells in the most prolific basin. Over the years, while growing its operations in Permian, Chevron has been able to generate more production while employing lower capital spending, thanks to advanced drilling techniques. Being a producer of both oil and natural gas, the company is well-positioned to gain.
Occidental
In the United States, Occidental is a major producer of oil and natural gas. In the domestic market, OXY has been experiencing efficiency improvements, including higher production volumes, while reducing capital spending and lowering operating costs. For creating long-term value for shareholders, Occidental has a strong focus on redirecting capital toward higher-return oil and gas projects.
Valero Energy
Valero Energy is among the world's leading low-cost fuel producers, with a combined throughput capacity of 3 million barrels per day. In addition to its presence in traditional refining, the company has exposure to lower-carbon fuels, comprising sustainable aviation fuel, renewable diesel and ethanol.
Here are three stocks with buy ranks and strong growth characteristics for investors to consider today, June 10:
Valero Energy Corporation (VLO - Free Report) : This energy company carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 49.6% over the last 60 days.
Valero has a PEG ratio of 0.38 compared with 0.49 for the industry. The company possesses a Growth Score of B.
Dycom Industries, Inc. (DY - Free Report) : This infrastructure services company carriesa Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 39.8% over the last 60 days.
Dycom has a PEG ratio of 0.80 compared with 1.26 for the industry. The company possesses a Growth Score of A.
Marathon Petroleum Corporation (MPC - Free Report) : This integrated downstream energy company carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 39.8% over the last 60 days.
Marathon Petroleum has a PEG ratio of 0.43 compared with 0.49 for the industry. The company possesses a Growth Score of B.
See the full list of top-ranked stocks here.
Learn more about the Growth score and how it is calculated here.
Key Takeaways WTI is above $85 and EIA sees $88.32 this year, yet top refiners gained 35% in six months.Valero Energy rose 47.6% as low fuel inventories and little spare capacity support strong refining margins.MPC climbed 38%; it says roughly 6% of global finished-fuel capacity went offline amid Middle East conflicts. The Iran war shock is driving high crude oil prices, with West Texas Intermediate (“WTI”) crude currently trading at more than $85 per barrel. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $88.32 per barrel this year, higher than $65.40 last year.
Thus, with oil prices likely to remain elevated, refiners could see pressure on their overall business. However, that does not appear to be the case. Notably, over the past six months, leading refiners such as Valero Energy Corporation (VLO - Free Report) and Marathon Petroleum Corp. (MPC - Free Report) have each witnessed more than 35% gains despite a highly favorable crude pricing environment. Let’s delve deeper.
Six-Month Price Chart
Image Source: Zacks Investment Research
Constrained Global Refining CapacityThe global refining capacity is constrained, and fuel inventories are low. On the demand side, gasoline, diesel and jet fuel remain resilient. This means people are still driving and flying quite often, while diesel demand suggests transportation, freight, agriculture and industrial activity are still holding up. As a result, with busy refineries and fuel not in abundant supply, refining margins for refiners are quite strong.
Thus, surprisingly, with crude prices likely to remain high, investors shouldn’t allocate their money only to exploration and production companies but also to refining players like Valero Energyand Marathon Petroleum, even though high crude prices have been increasing refiners’ input costs.
Time to Bet on 2 Refiners: VLO, MPCValero Energy expects to generate strong refining margins as the world has very little spare refining capacity, while inventories of refined products such as gasoline, jet fuel, and diesel are low. VLO will likely benefit from strong demand and tight supply, given its large, complex refineries with the capacity to process discounted heavy sour crude oil.
Over the past six months, Valero Energy, sporting a Zacks Rank #1 (Strong Buy), jumped 47.6%, outpacing the energy sector’s 22.2% gain.
Marathon Petroleum runs refining systems that are the largest in the United States. With high utilization of refineries, Marathon Petroleum is well-positioned to capture almost all of the available profitable opportunities. In its first-quarter earnings transcript, the leading refining player mentioned that roughly 6% of the world’s ability to produce finished fuels went offline due to the conflicts in the Middle East.
Investors should note that the company has the capability of processing cheaper crude from the United States and Canada to produce diesel and jet fuels that are in high demand. The stock surged 38% over the past six months and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
@ProsperTradingAcademy's Scott Bauer walks us through today's top three trades. He likes to Valero (VLO) for its respectable trading range, Micron (MU) for a short-term bullish trade, and Boost Run (BRUN) for its steady stock movement.
Key Takeaways VLO gained 53.3% in six months, outpacing industry growth and key refining peers.VLO benefits from Gulf Coast access to discounted heavy sour crude and flexible refinery operations.VLO returned $938M in Q1 2026, raised its dividend 6%, and ended the quarter with about $11B total liquidity. Valero Energy (VLO - Free Report) is a leading refining player with a robust network of 14 refineries located across the United States, Canada and Peru. The company has a combined high-complexity throughput capacity of 3 million barrels per day, which distinguishes it from other independent refiners. Valero Energy’s refineries have a combined Nelson Complexity Index of 11.5, implying that they can process a wide variety of feedstock and convert it into higher-value products.
Over the past six months, VLO stock has gained 53.3%, outperforming the industry’s 38.8% growth. Its peers, Phillips 66 (PSX - Free Report) and PBF Energy (PBF - Free Report) , have grown 28.5% and 40.2%, respectively. While price performance indicates a stock's attractiveness to some extent, it would be wiser to closely examine the company’s current business environment before offering any investment advice.
Image Source: Zacks Investment Research
VLO’s Complex Coastal Refinery Network & Operational Flexibility AidsValero Energy presents a favorable investment case, particularly due to its high-complexity coastal refinery network and the operational flexibility of its refineries. Notably, its advantaged Gulf Coast refining footprint benefits from crude availability and exposure to export markets.
Management stated that during the first quarter, VLO’s Gulf Coast presence enabled it to take advantage of discounted heavy sour crude feedstocks, particularly following increased Venezuelan supply. With the onset of the conflict in the Middle East, these market dynamics became even more pronounced, as certain heavy crude grades, including Canadian heavy crude, began trading at deeper discounts. The company also added that it continues to optimize its crude slate at the Gulf Coast, enabling it to improve refining economics and support better margins.
The heavy sour discounts act as a tailwind for Valero’s business, particularly in the second quarter. Its highly complex refining system is capable of processing heavy sour grades into high-value refined products efficiently. Additionally, the flexibility of Valero’s refinery systems allows it to shift product yields between light products and distillates based on market signals to capture higher margins during volatile times. These factors enable the company to lower its input costs while capturing better refining margins by adjusting its refining mix.
Image Source: Valero Energy Corporation
Valero’s Shareholder Returns Framework and Balance Sheet StrengthValero combines strong free cash flow generation with a disciplined capital allocation approach. The refining player returned $938 million to shareholders in the first quarter of 2026, implying a 59% payout ratio. Additionally, the company announced a 6% increase in its quarterly cash dividend to reward shareholders. Over the longer term, management has consistently delivered on its commitment to return cash to investors, achieving an average payout ratio of roughly 70% between 2015 and 2025. VLO also highlighted that its outstanding shares have declined by nearly 42% since 2014 through opportunistic share repurchases.
Valero’s capital return program is supported by its strong balance sheet. The company’s debt-to-capitalization ratio, net of cash, stood at 18% at the end of the first quarter. Furthermore, its cash and cash equivalents, combined with the liquidity available under its bank facilities, totaled approximately $11 billion at the end of the March quarter. VLO’s healthy financial position also allows it to return excess cash to investors through share buybacks. The company’s financial strength supports dividend growth and opportunistic buybacks, allowing it to deliver long-term shareholder value.
Valuation SnapshotThe valuation snapshot indicates that investors are now willing to pay a premium for Valero Energy due to the company’s strong fundamentals. This is reflected in VLO’s trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 7.84x compared with the broader industry average of 5.87x. However, it is currently trading cheaper compared to its peers, PSX and PBF, which are trading at 12.93x and 9.88x trailing 12-month EV/EBITDA, respectively.
Image Source: Zacks Investment Research
Time to Bet on the Stock or Wait?Valero Energy is expected to benefit from its Gulf Coast refinery network that allows it to take advantage of discounted heavy sour barrels. Further, the operational flexibility of its refineries enables it to convert cheaper feedstock into high-value products, thereby supporting profitability.
Given the current business environment and its disciplined shareholder return framework, investors should consider buying the VLO stock, sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Valero Energy (VLO - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this oil refiner have returned +4.4%, compared to the Zacks S&P 500 composite's -0.2% change. During this period, the Zacks Oil and Gas - Refining and Marketing industry, which Valero Energy falls in, has lost 1.1%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Valero Energy is expected to post earnings of $7.34 per share for the current quarter, representing a year-over-year change of +221.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +7.5%.
The consensus earnings estimate of $26.83 for the current fiscal year indicates a year-over-year change of +152.9%. This estimate has changed -4.3% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $21.64 indicates a change of -19.3% from what Valero Energy is expected to report a year ago. Over the past month, the estimate has changed +2.3%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Valero Energy.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Valero Energy, the consensus sales estimate of $35.82 billion for the current quarter points to a year-over-year change of +19.8%. The $133.37 billion and $128.96 billion estimates for the current and next fiscal years indicate changes of +8.7% and -3.3%, respectively.
Last Reported Results and Surprise HistoryValero Energy reported revenues of $32.38 billion in the last reported quarter, representing a year-over-year change of +7%. EPS of $4.22 for the same period compares with $0.89 a year ago.
Compared to the Zacks Consensus Estimate of $30.88 billion, the reported revenues represent a surprise of +4.86%. The EPS surprise was +37.46%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Valero Energy is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Valero Energy. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +24% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Valero Energy (VLO - Free Report) San Antonio, TX-based Valero Energy Corporation is the largest independent refiner and marketer of petroleum products in the United States. The company was founded in 1980. It has a refining capacity of 3 million barrels per day across 14 refineries located throughout the United States, Canada and the United Kingdom.
VLO is a #1 (Strong Buy) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Oils-Energy stock. VLO has a Momentum Style Score of B, and shares are up 4.4% over the past four weeks.
Nine analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $9.11 to $26.83 per share. VLO boasts an average earnings surprise of +28%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, VLO should be on investors' short list.
Five Below (FIVE - Free Report) came out with quarterly earnings of $2.22 per share, beating the Zacks Consensus Estimate of $1.7 per share. This compares to earnings of $0.86 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +30.92%. A quarter ago, it was expected that this discount retailer would post earnings of $3.99 per share when it actually produced earnings of $4.31, delivering a surprise of +8.02%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Five Below, which belongs to the Zacks Retail - Miscellaneous industry, posted revenues of $1.29 billion for the quarter ended April 2026, surpassing the Zacks Consensus Estimate by 6.70%. This compares to year-ago revenues of $970.53 million. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Five Below shares have added about 17% since the beginning of the year versus the S&P 500's gain of 11.2%.
What's Next for Five Below?While Five Below has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Five Below was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.06 on $1.13 billion in revenues for the coming quarter and $8.05 on $5.31 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Miscellaneous is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Torrid Holdings (CURV - Free Report) , another stock in the broader Zacks Retail-Wholesale sector, has yet to report results for the quarter ended April 2026. The results are expected to be released on June 4.
This women's apparel retailer is expected to post quarterly loss of $0.02 per share in its upcoming report, which represents a year-over-year change of -133.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Torrid Holdings' revenues are expected to be $240.35 million, down 9.6% from the year-ago quarter.
Five Below (NASDAQ:FIVE) shares fell about 11% at Thursday's market open, as investors looked past a stronger-than-expected first quarter earnings report and instead focused on the assumptions underlying the company's raised full-year guidance.
Five Below raised its full-year fiscal 2026 guidance, projecting net sales of $5.40 billion to $5.48 billion and adjusted diluted earnings per share of $8.65 to $9.05.
The discount retailer said its fiscal 2026 outlook reflects tariff rates currently in place through July 24 and assumes they will revert to levels that existed at the start of the fiscal year for the remainder of the year. The guidance also excludes any potential benefit from tariff refunds or share repurchases.
For the first quarter ended May 2, Five Below reported adjusted diluted earnings per share of $2.22, exceeding the Wall Street consensus estimate of $1.69.
Revenue increased 32.5% year over year to $1.29 billion, above analysts' expectations of approximately $1.20 billion.
Comparable sales rose 22.7% during the quarter, while operating income climbed to $154.2 million from $50.8 million a year earlier. Operating margin expanded to 12% from 5.2% in the prior-year period.
Net income totaled $123.1 million, or $2.21 per diluted share, compared with $41.1 million, or $0.75 per diluted share, in the first quarter of fiscal 2025.
The company opened 49 net new stores during the quarter, ending the period with 1,970 locations across 46 states.
Five Below CEO Winnie Park credited the results to the company's merchandising strategy and focus on value.
"We are thrilled with our outstanding first quarter performance, which is a testament to the team's execution of our customer-centric strategy," Park said in the earnings release. “The result was broad-based growth across our merchandising worlds, new and existing customers, and all demographic and geographic segments.”
“The S&P 500 was up more than 16% over April and May, a magnitude that’s only happened in four other instances since World War II, Deutsche Bank Research found,” as noted by CNBC. “The last time the S&P 500 rose like it is now outside of a recession period was the few months before the 1987 crash.”
There are also other signs of a potential crash.
For example, if we look at the Case Shiller P/E ratio, it currently stands at 42.53 – its second-highest point since its 1999 high of 43.21. That was also right before the dot-com crash. You can see that chart here.
Markets are wildly mixed this morning.
The S&P 500 is down by 0.36%, or by 27 points. The SPDR S&P 500 ETF (SPY) is down by 0.3%, or by $2.25. The Dow is up by 0.89%, or by 460 points. The Nasdaq is down by 1.15%, or by 353 points. Oil is down by $3.19 at $92.83. Bitcoin is down by $527 at $63,512.
Let’s start with the Dow.
A day after slipping on higher oil prices and yields, the Dow is climbing as investors shift away from the tech sector and instead jump into blue-chip and defensive stocks. Plus, new news of a ceasefire and cooling energy prices are pumping the index.
Meanwhile, the tech-heavy Nasdaq is sinking following an underwhelming report from Broadcom (NASDAQ: AVGO | AVGO Price Prediction), which is down 13% in premarket. Fueling a good deal of downside in the name, CEO Hock Tan did not raise the company’s full-year target of $100 billion in AI chips. For its most recent quarter, the company did post adjusted EPS of $2.44, as compared to estimates of $2.40. Revenue of $22.19 billion was below estimates of $22.27 billion.
Not helping, HSBC analysts flagged a slide in chip prices, coupled with a slowdown in AI spending and rollout, as among their “biggest worries,” as noted by CNBC.
Market Movers: Five Below Plunges $23 Shares of Five Below (NASDAQ: FIVE) are down 10%, or by $23 a share, after solid earnings.
The company’s EPS of $2.22 beat by 43 cents, and revenue of $1.28 billion (up 31.9% year over year) beat by $50 million. It also delivered a significant improvement in profitability. Operating income climbed to $154.2 million from $50.8 million in the same period last year. It even raised its full-year forecast. Unfortunately, some analysts are questioning its valuation.
For example, as noted by Investing.com, “Mizuho noted that investors may question the size of the fiscal 2026 guidance increase, with second-half estimates unchanged. Current sales trends appear strong in the second quarter to date, though management expressed caution about the consumer spending environment.”
Analysts at Mizuho also reiterated an outperform rating on Nvidia (NASDAQ: NVDA), noting that they remain bullish on the optical/networking market.
Citi analysts reiterated a buy rating on Oracle (NYSE: ORCL), raising their price target to $330 from $320. The firm noted, “While investor concerns linger on financing/execution of capacity buildouts, we believe ORCL remains on track to deliver one of the strongest revenue/EPS accelerations in tech as large AI contracts ramp,” as quoted by CNBC.
Five Below (NASDAQ:FIVE) shares fell about 11% at Thursday's market open, as investors looked past a stronger-than-expected first quarter earnings report and instead focused on the assumptions underlying the company's raised full-year guidance.
Five Below raised its full-year fiscal 2026 guidance, projecting net sales of $5.40 billion to $5.48 billion and adjusted diluted earnings per share of $8.65 to $9.05.
The discount retailer said its fiscal 2026 outlook reflects tariff rates currently in place through July 24 and assumes they will revert to levels that existed at the start of the fiscal year for the remainder of the year. The guidance also excludes any potential benefit from tariff refunds or share repurchases.
For the first quarter ended May 2, Five Below reported adjusted diluted earnings per share of $2.22, exceeding the Wall Street consensus estimate of $1.69.
Revenue increased 32.5% year over year to $1.29 billion, above analysts' expectations of approximately $1.20 billion.
Comparable sales rose 22.7% during the quarter, while operating income climbed to $154.2 million from $50.8 million a year earlier. Operating margin expanded to 12% from 5.2% in the prior-year period.
Net income totaled $123.1 million, or $2.21 per diluted share, compared with $41.1 million, or $0.75 per diluted share, in the first quarter of fiscal 2025.
The company opened 49 net new stores during the quarter, ending the period with 1,970 locations across 46 states.
Five Below CEO Winnie Park credited the results to the company's merchandising strategy and focus on value.
"We are thrilled with our outstanding first quarter performance, which is a testament to the team's execution of our customer-centric strategy," Park said in the earnings release. “The result was broad-based growth across our merchandising worlds, new and existing customers, and all demographic and geographic segments.”
FIVE stock is slipping. Watch the price action here. FIVE was trading at $194.08 Thursday afternoon, down 12.93%, according to data from Benzinga Pro.
Shares opened at $197.47 and touched an intraday low of $191.17, while volume of 2.8 million shares reflects heavy selling pressure. The two-day combined loss now totals roughly 19%.
The selloff comes despite what Loop Capital’s Anthony Chukumba pegged as a beat and raise quarter that “blew the proverbial doors off.”
Five Below posted Q1 revenue of $1.29 billion, well ahead of the $1.22 billion consensus, while adjusted EPS of $2.22 crushed the $1.74 estimate.
Comparable-store sales surged 22.7%, driven by a 19% jump in transactions and a 4% increase in average ticket.
“Our continued focus on compelling newness at amazing value and great store execution is at the heart of our operating flywheel,” said CEO Winnie Park.
Buy the Rumor, Sell the News Chukumba reiterated his Buy rating and $250 price target in a note published Wednesday, calling the aftermarket drop “a classic case of ‘buy on the rumor, sell on the news'” and flagging it as an attractive buying opportunity.
The price target is based on roughly 27.9 times Chukumba’s revised fiscal 2026 EPS estimate of $8.97 — a premium multiple he argues is justified by Five Below’s “stellar recent performance and near-term earnings growth prospects.”
At current levels around $195, FIVE trades at approximately 21x that same estimate — in line with comparable peers, according to Loop Capital.
FIVE Stock Price Activity: Five Below shares were down 12.42% at $195.20 at the time of publication Thursday, according to Benzinga Pro.
Over the past month, FIVE has declined about 15.9% versus a 4.8% rise in the S&P 500 and is up roughly 3% year-to-date compared to the index’s 10.3% gain.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Key Takeaways Five Below reports Q1 sales growth of 32.5%, driven by a 22.7% increase in comparable sales.FIVE expands adjusted gross margin by 340 bps and grows adjusted operating income 160% year over year.FIVE raises fiscal 2026 sales, earnings and comparable sales guidance after a strong first quarter. Five Below, Inc. (FIVE - Free Report) reported impressive first-quarter fiscal 2026 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. Also, net sales and earnings increased year over year, supported by strong comparable sales growth driven by gains in both traffic and average ticket.
More on Five Below’s Q1 ResultsFIVE posted adjusted earnings per share of $2.22 in the fiscal first quarter, which beat the Zacks Consensus Estimate of $1.70. Also, the figure surged 158% from 86 cents in the year-ago quarter.
Net sales were $1,285.6 million, which increased 32.5% year over year from $970.5 million. Also, this metric surpassed the Zacks Consensus Estimate of $1,205 million.
Comparable sales (comps) increased 22.7% year over year, surpassing our estimated growth of 15.6% growth. Comps growth was driven by a 4% increase in ticket and a 19% rise in transactions.
Insight Into Margins & Costs of FIVEAdjusted gross profit grew 46% year over year to $478.6 million from $328.4 million. The adjusted gross margin increased approximately 340 basis points (bps) year over year to 37.2%. The improvement was primarily driven by fixed-cost leverage from strong comparable sales growth, along with distribution efficiencies and a lower shrink accrual, which further supported profitability during the quarter.
Selling, general and administrative (SG&A) costs stood at $324 million. While SG&A costs, as a percentage of net sales, decreased approximately 250 bps to 25.2%. The improvement was primarily driven by strong comparable sales growth, which enabled fixed costs to be spread across a larger revenue base. These benefits were partially offset by higher incentive compensation expenses and increased store labor costs associated with April's physical inventory counts.
Adjusted operating income was $154.8 million, up 160% year over year from $59.6 million. The adjusted operating margin increased approximately 600 bps to 12%.
FIVE Provides Q1 Store UpdateThe company opened 49 net new stores and ended the quarter with 1,970 stores across 46 states. This represents a 7.9% increase in the number of stores from the end of the first quarter of fiscal 2025. The company expects to open approximately 50 new stores in the fiscal second quarter and 150 new stores for fiscal 2026.
Five Below’s Financial Snapshot: Cash & Equity OverviewThe company ended the fiscal first quarter with cash and cash equivalents of $638.9 million and short-term investment securities of $474.4 million. Total shareholders’ equity was $2,312.5 million as of May 02, 2026.
Inventory totaled $813.3 million, increasing approximately 16% year over year, alongside a 10% increase in units and a 7% rise in average inventory per store. Management attributed the inventory build to opportunistic purchasing in a favorable tariff environment and efforts to maintain a consistent flow of products amid a more challenging global supply chain environment.
What to Expect from FIVE in the Future?For the fiscal second quarter of fiscal 2026, the company expects total sales of $1.18 billion to $1.20 billion, supported by comparable sales growth of 7% to 9%. The company expects fiscal second-quarter gross margin improvement to be supported by higher merchandise margins, fixed-cost leverage and a lower shrink accrual. These benefits are expected to be partially offset by higher supply chain and fuel-related transportation costs. Adjusted SG&A is projected to delever slightly due to increased marketing investments and higher store labor expenses.
Adjusted operating margin is expected to improve to 7% at the midpoint, a 160-basis point increase driven by gross margin expansion. The adjusted net income is expected to be in the range of $65 million to $72 million, with adjusted earnings per share (EPS) expected to be between $1.17 and $1.29.
The company increased its full-year outlook following stronger-than-expected first-quarter results and an improved second-quarter sales forecast. Management expects sales of $5.4 billion to $5.48 billion compared with the previously guided range of $5.2 billion to $5.3 billion, and comparable sales growth of 6% to 8% for the year, compared with the previously guided range of 3% to 5%. Adjusted operating margin is projected to expand 170 bps to 11.6% at the midpoint compared with 10.9% guided previously, driven by gross margin improvement.
Adjusted net income is expected to be in the range of $482 million to $504 million, compared with the previously guided range of $431 million to $459 million. Adjusted EPS is expected to be in the range of $8.65 to $9.05 compared with the previously guided range of $7.74 to $8.25, supported by continued sales and profitability growth. Capital expenditures are expected to be in the range of $230 million to $250 million.
FIVE’s shares have gained 28.7% in the past six months against the industry’s decline of 18.8%. FIVE currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Other Stocks to ConsiderSome other top-ranked stocks have been discussed below:
Tapestry, Inc. (TPR - Free Report) provides accessories and lifestyle brand products in North America, Greater China, the rest of Asia and internationally. At present, TPR sports a Zacks Rank of 1 (Strong Buy). You can see ???the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TPR’s current fiscal-year sales and earnings implies growth of 13.8% and 36.3%, respectively, from the year-ago figures. TPR has delivered a trailing four-quarter earnings surprise of 15.6%, on average.
Victoria’s Secret & Co. (VSXY - Free Report) operates as a specialty retailer of women's intimate apparel and other apparel and beauty products worldwide. At present, VSXY carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Victoria's Secret’s current fiscal-year sales implies growth of 5.8%, from the year-ago figures.
ITOCHU Corporation (ITOCY - Free Report) trades and imports/exports various products worldwide. At present, ITOCY carries a Zacks Rank of 2.
The Zacks Consensus Estimate for ITOCY’s current fiscal-year sales implies growth of 2.1%, and the same for earnings implies a decline of 48.2% from the year-ago figures.
Five Below, Inc. reported a clear double beat in Q1, as store traffic improved to a highly impressive level and Five Below reports strong margin gains. The report was accompanied by a noteworthy FY2026 guidance raise, as FIVE also expects healthy momentum ahead. After an intriguing post-earnings decline, I estimate FIVE stock to have 27% upside to $250.7.
Shares of Five Below (FIVE 1.92%) declined on Thursday as investors questioned whether the extreme-value retailer's heady growth can persist.
Image source: Getty Images.
Strong Q1 performance Five Below's net sales surged 32.5% year over year to $1.3 billion in its fiscal first quarter, which ended on May 2.
The discount retail chain opened 49 net stores during the quarter. That brought its total count to 1,970 locations across 46 states.
Moreover, sales at Five Below's existing stores grew at a blistering pace. Comparable sales, which measure revenue from locations open for at least 13 months, jumped 22.7%.
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CEO Winnie Park said the company saw "broad-based growth across our merchandising worlds, new and existing customers, and all demographic and geographic segments."
All told, Five Below's adjusted net income soared 160% to $123.5 million, or $2.22 per share. That topped Wall Street's estimates, which had called for per-share profits of $1.79.
But can the good times last? Five Below's results were so strong that analysts began to wonder whether its growth may have peaked. Part of the company's success in the first quarter was due to its ability to capitalize on viral social media trends surrounding the popular "Squishy Dumplings" toys, as well as higher tax refunds that boosted consumer spending.
For its part, Five Below expects full-year net sales to grow roughly 14% to $5.4 billion, driven by 150 net store openings and comparable sales growth of 6% to 8%. Management also projects adjusted net income of $482 million to $504 million, or $8.65 to $9.05 per share.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Five Below. The Motley Fool has a disclosure policy.
For the quarter ended April 2026, Five Below (FIVE - Free Report) reported revenue of $1.29 billion, up 32.5% over the same period last year. EPS came in at $2.22, compared to $0.86 in the year-ago quarter.
The reported revenue represents a surprise of +6.7% over the Zacks Consensus Estimate of $1.2 billion. With the consensus EPS estimate being $1.70, the EPS surprise was +30.92%.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how Five Below performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Comparable Sales: 22.7% versus 14.8% estimated by seven analysts on average.Total stores at end of period: 1,970 compared to the 1,965 average estimate based on five analysts.New Store Openings: 49 compared to the 44 average estimate based on four analysts.Average net sales per store: $0.70 versus the four-analyst average estimate of $1.13.View all Key Company Metrics for Five Below here>>>
Shares of Five Below have returned -4.8% over the past month versus the Zacks S&P 500 composite's +4.6% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term.
Key Takeaways Five Below topped Q1 estimates; comparable sales rose 22.7% and adjusted EPS was $2.22.Five Below leaned on creator content, connected TV and social listening to spot and amplify trends faster.FIVE raised full-year sales to $5.4B-$5.48B and EPS to $8.65-$9.05, but kept back-half comps cautious. Five Below, Inc. (FIVE - Free Report) used its first-quarter fiscal 2026 call to press a forward-looking case, not just celebrate a beat. Management argued the latest surge in traffic reflected deeper operating changes across merchandising, marketing and store execution.
That message mattered because the company raised its full-year outlook while keeping a cautious view on the consumer backdrop. The tension between strong internal momentum and a still-guarded macro stance shaped the call.
FIVE Leans on a Broader Growth StoryChief executive officer Winnie Park framed the quarter as evidence that Five Below’s operating reset is gaining traction. She said the company is now executing more cohesively around curated product stories, social-first marketing and an easier store experience.
Park emphasized that growth was not tied to one item or one department. She said 15 of 18 departments posted positive comparable sales and that gains stretched across districts, store vintages and income cohorts.
That broader message was important because it moved the discussion away from a single viral product cycle. Management’s stance was that trend capture is now a repeatable capability rather than a one-off lift.
Five Below Pushes Traffic, Not Just TicketThe company reported adjusted earnings of $2.22 per share, ahead of the Zacks Consensus Estimate of $1.7, while revenues of $1.29 billion topped the consensus $1.21 billion. The EPS surprise was 30.92%, and the revenue surprise was 6.7%.
Comparable sales rose 22.7%, with Park saying transactions increased 19% while ticket rose 4%. That mix reinforced management’s view that customer engagement and store traffic are improving in a meaningful way.
Chief financial officer Daniel Sullivan added that adjusted gross margin rose 340 basis points to 37.2%, while adjusted operating margin expanded about 600 basis points to 12%. Fixed-cost leverage, better distribution efficiency and a lower shrink accrual supported the gain.
FIVE’s Marketing Playbook Is Getting SharperPark repeatedly returned to the company’s social and digital playbook. She said Five Below is using creator content, connected TV and more active social listening to spot and amplify trends faster.
In analyst Q&A, she said the shift away from more traditional marketing has helped drive both new and repeat customers. She also pointed to progress in building the company’s email database, which management sees as a foundation for more targeted outreach and eventual loyalty efforts.
Asked by Guggenheim and Gordon Haskett analysts about awareness and marketing upside, Park said brand awareness remains low relative to competitors. That left management sounding confident that traffic gains still have room to build from here.
Five Below Defends Durability of TrendsThe biggest scrutiny in Q&A centered on how much of the quarter came from viral products, especially the Squishy Dumpling trend. Park acknowledged the item and related assortment helped drive traffic, but she described the underlying strategy as high single digit in run-rate contribution.
Sullivan reinforced that point when asked about the current quarter. He called the May squishy event a strong brand moment but cautioned that it was not designed to be a meaningful driver of the quarter’s comparable-sales profile.
That was one of the clearest tone-setting moments on the call. Management wanted investors to see trend amplification as a tool that supports the model, not as the model itself.
FIVE Raises the Bar But Keeps Guard UpFor the second quarter, the company expects sales of $1.18 billion to $1.2 billion, comparable-sales growth of 7% to 9% and adjusted earnings per share of $1.17 to $1.29. For the full year, it now sees sales of $5.4 billion to $5.48 billion and adjusted earnings per share of $8.65 to $9.05.
Sullivan said the higher outlook reflects first-quarter outperformance and a better second-quarter sales view. Still, he said the back-half assumptions for comparable sales remain unchanged.
That caution came up several times in Q&A. Management cited stronger comparisons ahead, fully lapped pricing actions and pressure on consumers from fuel costs, sticky inflation and a softer labor market, even as it said current data does not show a trade-down shift.
Five Below Stays in Growth ModeAsked about capital allocation, Sullivan said the company remains focused on funding growth initiatives rather than returning capital more aggressively. He noted Five Below ended the quarter with roughly $1.1 billion in cash, cash equivalents and investments, giving it flexibility from a position of strength.
Management also sounded constructive on store growth. Sullivan said newer store classes are performing especially well and tied that to a more deliberate approach to site selection and grand-opening execution.
Across several exchanges, executives returned to the same operating posture: protect value, invest behind winning capabilities and keep the assortment fresh. The call’s broader message was disciplined expansion rather than a short-term victory lap.
Zacks Signals Favor Growth and MomentumFIVE carries a Zacks Rank #2 (Buy), along with a Growth Score of A, a Momentum Score of A and a VGM Score of A. Under the Zacks framework, that combination points to favorable growth and momentum characteristics, with the strong VGM mark signaling attractive overall style traits. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock also has a Value Score of D, which indicates value is not the main part of the current setup. Even so, a Zacks Rank #2 paired with A-level Growth, Momentum and VGM scores is generally viewed positively over the near term, though the rank can change as earnings estimate revisions adjust after the latest results.
Five Below delivered robust Q1 2026 results, with net sales up 32.5% and comps up 22.7%, driven by strong transaction growth. FIVE's turnaround is now scaling, evidenced by broad-based traffic gains, improved margins, and effective marketing leveraging social media trends. Despite temporary Q1 tailwinds, I see the current ~21x NTM P/E as undervaluing FIVE's sustainable earnings growth potential.
Five Below NASDAQ: FIVE fell more than 13% the day after the company reported a mostly bullish Q1 2026 earnings report. The discount retailer delivered revenue of $1.29 billion. That beat expectations for $1.23 billion and, more importantly, was 32% higher year over year (YOY).
Five Below Today
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52-Week Range$121.11▼
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The results were even better on the bottom line. Adjusted earnings per share of $2.22 beat expectations for $1.77 and were 158% higher on a YOY basis.
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The company reported a resilient consumer who is responding to the company’s digital marketing efforts. Furthermore, Five Below reported that the strength of the numbers was across all incomes, stores, and departments.
The strength of the numbers wasn’t just about store traffic. The company’s margins improved based on fixed-cost leverage.
Five Below ended the quarter with $1.1 billion in cash and investments on its balance sheet.
The issue was with the company’s guidance. While Five Below raised its full-year guidance, management expressed some concern over the second half of the year. That’s when uncertainty about the health of the consumer will collide with tougher YOY comparisons.
Investors Focus on Consumer and Tariff RisksFive Below is known for providing a treasure hunt experience for consumers. So, it’s a little ironic that the company’s immediate problem is one that’s hiding in plain sight. The elephant in the room is the future state of the consumer.
The strong quarter needs context, since earnings headlines are always backward-looking. On the earnings call, Five Below management noted that the company’s results were likely due to consumers spending a portion of their tax refunds in their stores.
However, as with stock prices, past performance doesn’t guarantee future results. Five Below faces quantifiable tariff impacts that some analysts believe may be understated. But it also has a consumer who continues to be pinched by higher gas prices, higher inflation, and, in some cases, unemployment.
That’s a perfect storm of uncertainty, and investors hate uncertainty.
Another area of uncertainty came from the company’s tariff guidance. Management expects tariffs to return to the levels they were at the start of the company’s fiscal year. Analysts weren’t so sure the tariff rollback would happen. And a lighter forecast would be problematic at a time when Five Below continues its aggressive expansion strategy.
It's a binary outlook. If Five Below is correct, even the raised guidance may be too conservative. On the other hand, if the tariffs remain in place, the guidance is probably too optimistic.
Why the Selloff May Be OverdoneThe post-earnings reaction to Five Below’s earnings needs to be viewed in light of what happened prior to earnings. FIVE stock was down about 5% in the 30 days before the earnings report. That was due to other retailers telling a similar story about the state of the consumer.
Therefore, with shares trading at nearly double the normal volume, it’s hard to make the argument that all the selling was priced in. In fact, the counterargument could be that investors were hoping for bullish guidance that didn’t come.
That said, this wouldn’t be the first time the consumer has been counted out in the last few years. In the face of numerous obstacles, consumers continue to spend. Betting on the “this time it’s different” narrative may be a bad bet. And with short interest hanging around 3%, there doesn’t appear to be significant short pressure weighing on the stock.
That means the technical setup may give investors an accurate picture. In this case, FIVE appears to have hit oversold levels.
Valuation Remains a Key Concern for InvestorsThough the stock already looks oversold, if investors want to wait for a deeper pullback, there is evidence suggesting one could be coming. Specifically, FIVE looks overvalued. The stock currently trades at around 30x earnings, which is a premium to the S&P 500 and its own historic average. A similar story is in place for the company’s price-to-sales (P/S) and price-to-book (P/B) ratios.
Investors have been willing to give FIVE a premium because of its positioning in the discount retail space. However, it’s important to note that FIVE currently trades at twice the P/E of Dollar General NYSE: DG, Dollar Tree NASDAQ: DLTR, and Ollie’s Bargain Outlet NASDAQ: OLLI.
Analysts Remain Divided on FIVE Stock's Next MoveAnalyst sentiment is mixed. The Five Below analyst forecasts on MarketBeat show three analysts weighing in immediately after earnings. Morgan Stanley lowered its price target to $235 from $242. However, that was offset by BNP Paribas Exane, which raised its target to $291 from $262.
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Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. But finding a great growth stock is not easy at all.
In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.
However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects, makes it pretty easy to find cutting-edge growth stocks.
Our proprietary system currently recommends Five Below (FIVE - Free Report) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.
Research shows that stocks carrying the best growth features consistently beat the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).
While there are numerous reasons why the stock of this discount retailer is a great growth pick right now, we have highlighted three of the most important factors below:
Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Five Below is 7.1%, investors should actually focus on the projected growth. The company's EPS is expected to grow 21.6% this year, crushing the industry average, which calls for EPS growth of 4%.
Cash Flow GrowthCash is the lifeblood of any business, but higher-than-average cash flow growth is more beneficial and important for growth-oriented companies than for mature companies. That's because, high cash accumulation enables these companies to undertake new projects without raising expensive outside funds.
Right now, year-over-year cash flow growth for Five Below is 26.2%, which is higher than many of its peers. In fact, the rate compares to the industry average of 4%.
While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 24.5% over the past 3-5 years versus the industry average of 5.1%.
Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
There have been upward revisions in current-year earnings estimates for Five Below. The Zacks Consensus Estimate for the current year has surged 5.6% over the past month.
Bottom LineWhile the overall earnings estimate revisions have made Five Below a Zacks Rank #2 stock, it has earned itself a Growth Score of A based on a number of factors, including the ones discussed above.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination positions Five Below well for outperformance, so growth investors may want to bet on it.
The retail earnings season has delivered several standout winners, proving that strong brands and effective execution can still drive impressive results despite a mixed consumer spending backdrop.
While many retailers continue to navigate tariff uncertainty and shifting consumer shopping habits, a handful of companies reported Q1 results that easily surpassed Wall Street’s expectations last week.
Among the biggest winners were Ulta Beauty (ULTA - Free Report) ), Victoria's Secret (VSXY - Free Report) ), and Five Below (FIVE - Free Report) ). Each company not only beat earnings expectations but also demonstrated business momentum that could support further gains in the months ahead.
ULTA – Zacks Rank #3 (Hold)Demand for Ulta Beauty Products Remains ResilientUlta Beauty delivered an impressive Q1 performance that highlighted the strength of the beauty category and the company's dominant market position.
Quarterly sales climbed 11% year over year to $3.16 billion and edged estimates of $3.11 billion, with comparable sales increasing 5%. More impressive, adjusted earnings per share jumped 15% YoY to $7.74, and comfortably exceeded Q1 EPS expectations of $6.90 by 12%.
The ability to grow sales and earnings at a double-digit pace in a mature retail category demonstrates the power of Ulta’s omnichannel strategy and brand partnerships. Management also raised its full-year EPS outlook following the strong quarter, as the results were broad-based, with growth across cosmetics, skincare, fragrance, haircare, and wellness.
Ulta benefited from higher customer spending, increased traffic, new store openings, and contributions from its Space NK acquisition, a leading British beauty retailer it acquired as part of its strategy to expand into the UK market. Furthermore, membership in the company's loyalty program continues to expand, approaching 47 million members.
With management increasing guidance and beauty demand remaining healthy, Ulta’s stock could be attractive for investors looking for a high-quality retail leader with durable growth prospects.
Image Source: Zacks Investment Research
VSXY – Zacks Rank #1 (Strong Buy)Victoria's Secret’s Turnaround Strategy Is Delivering ResultsVictoria's Secret delivered one of the biggest earnings surprises last week, with Q1 EPS of $0.60 coming in at more than double the consensus estimate of $0.29.
Turnaround efforts continue to gain traction under CEO Hillary Super, highlighted by the company also raising its full-year outlook after Q1 revenue of $1.55 billion beat expectations as well ($1.52 billion Consensus).
Refocused on its core categories while improving product assortments and marketing effectiveness, Victoria's Secret’s initiatives have helped reignite demand in its bra business, increased customer engagement, and improved shopping frequency. Investors responded enthusiastically, sending shares sharply higher following its earnings release last Tuesday, with VSXY hitting an all-time high of $81 a share.
For investors seeking a retail turnaround story with improving fundamentals and earnings revisions moving higher, Victoria's Secret stock is worth a closer look. As shown below, EPS estimates for Victoria’s Secret’s current FY27 (F1) and FY28 (F2) have spiked well over 15% in the last 60 days, respectively.
Image Source: Zacks Investment Research
FIVE – Zacks Rank #1 (Strong Buy)Five Below’s Growth Engine is Still Running StrongFive Below once again demonstrated why it remains one of the fastest-growing retailers in the market. The discount retailer reported Q1 EPS of $2.22, which soared 158% from $0.86 per share a year ago and crushed expectations of $1.70 by 30%.
This came as Q1 sales surged more than 30% to $1.28 billion and surpassed estimates of 1.2 billion. The provider of trendy merchandise for $5 or less saw comparable sales surge over 20%, highlighting exceptionally strong customer demand across its value-oriented merchandise assortment.
Joining Ulta and Victoria’s Secret in raising its full-year guidance, Five Below is reflecting confidence in its growth trajectory despite concerns about tariffs and consumer spending trends. To that point, Five Below continues to benefit from new store openings, merchandising improvements, and its ability to attract shoppers seeking affordable discretionary purchases.
Although Five Below’s stock experienced volatility after earnings as investors debated whether comparable-sales growth could remain at such elevated levels, its underlying business performance is hard to ignore. Revenue growth exceeding 30%, significant earnings upside, and increased guidance suggest that Five Below's expansion strategy remains firmly on track.
For growth-oriented investors looking for retail exposure, Five Below remains one of the most compelling stories in the sector.
Image Source: Zacks Investment Research
Bottom LineThe retail earnings season has revealed a clear theme: companies with strong brands, differentiated customer experiences, and disciplined execution are still thriving. Ulta Beauty benefited from resilient demand for beauty products, Victoria's Secret continued its successful turnaround, and Five Below delivered another quarter of exceptional growth.
With all three companies beating earnings expectations and providing encouraging guidance, investors may want to consider these retail leaders as potential opportunities for the second half of the year.
Five Below (FIVE - Free Report) has been beaten down lately with too much selling pressure. While the stock has lost 10.4% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier.
We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillator that measures the speed and change of price movements.
RSI oscillates between zero and 100. Usually, a stock is considered oversold when its RSI reading falls below 30.
Technically, every stock oscillates between being overbought and oversold irrespective of the quality of their fundamentals. And the beauty of RSI is that it helps you quickly and easily check if a stock's price is reaching a point of reversal.
So, by this measure, if a stock has gotten too far below its fair value just because of unwarranted selling pressure, investors may start looking for entry opportunities in the stock for benefiting from the inevitable rebound.
However, like every investing tool, RSI has its limitations, and should not be used alone for making an investment decision.
Why a Trend Reversal is Due for FIVEThe heavy selling of FIVE shares appears to be in the process of exhausting itself, as indicated by its RSI reading of 28.99. So, the trend for the stock could reverse soon for reaching the old equilibrium of supply and demand.
This technical indicator is not the only factor that calls for a potential rebound for the stock. There is a fundamental indicator as well. A strong agreement among sell-side analysts covering FIVE in raising earnings estimates for the current year has led to an increase in the consensus EPS estimate by 10.2% over the last 30 days. And an upward trend in earnings estimate revisions usually translates into price appreciation in the near term.
Moreover, FIVE currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises. This is a more conclusive indication of the stock's potential turnaround in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Key Takeaways MU, FIVE and MPC passed a momentum screen from a universe of more than 7,743 stocks.Micron has a Momentum Score of A and expects 621.7% earnings growth this year.Marathon Petroleum posted a 49.5% average earnings surprise and sees 180.8% growth. Investors now aiming for exceptional returns should concentrate on high-momentum stocks. To uncover stocks with further upside potential, they can follow Richard Driehaus’s famous “buy high and sell higher” approach, which earned him a place on Barron’s All-Century Team.
By applying the Driehaus momentum-investing approach, Micron Technology, Inc. (MU - Free Report) , Five Below, Inc. (FIVE - Free Report) and Marathon Petroleum Corporation (MPC - Free Report) have emerged as strong momentum plays and attractive entry points for investors.
Inside the Driehaus StrategyRegarding the strategy, Driehaus once said: “I would much rather invest in a stock that’s increasing in price and take the risk that it may begin to decline than invest in a stock that’s already in decline and try to guess when it will turn around.” In line with this insight, the American Association of Individual Investors (“AAII”) considered the 50-day moving average as one of the key criteria when creating a portfolio in line with Driehaus’ philosophy.
It is calculated by dividing the numerator (month-end price minus 50-day moving average of month-end price) by the 50-day moving average of the month-end price. Another momentum indicator — positive relative strength — has also been included in this strategy. A positive percentage 50-day moving average indicates that the stock is trading above its 50-day moving average, signaling an uptrend.
Moreover, AAII found that Driehaus primarily focuses on strong earnings growth rates and impressive earnings projections to pick potential outperformers. Companies with a strong history of beating estimates are also given importance in this strategy, which was designed to provide better returns over the long term.
Research Wizard Screening ParametersTo make the strategy more profitable, we have considered only those stocks that have a Zacks Rank #1 (Strong Buy) and a Momentum Score of A or B. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1, offer the best upside potential.
• Zacks Rank equal to #1
No matter whether the market is good or bad, stocks with a Zacks Rank #1 have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
• Last 5-year average EPS growth rates above 2%
Strong EPS growth history ensures an improving business
• Trailing 12-month EPS growth greater than 0 and industry median
Higher EPS growth compared to the industry average indicates superior earnings performance
• Last four-quarter average EPS surprise greater than 5%
Solid EPS surprise history indicates better price performance
• Positive percentage change in 50-day moving average and relative strength over 4 weeks
Positive percentage change in the 50-day moving average and the relative strength signal uptrend
• Momentum Score equal to or less than B
A favorable momentum score indicates that it is ideal to capitalize on the momentum with the highest probability of success.
These few parameters have narrowed the universe of more than 7,743 stocks to only 15.
Here are three of the 15 stocks:
Micron Technology Micron Technology is a provider of memory and storage products globally. It has a Momentum Score of A. The trailing four-quarter earnings surprise for MU is 21.7%, on average. The company’s expected earnings growth rate for the current year is 621.7% (read more: Micron vs. Marvell: Only One AI Semiconductor Stock Is a Buy This June).
Five BelowFive Below is a U.S.-based specialty discount retailer that offers a wide range of products at value-oriented price points. It has a Momentum Score of A. The trailing four-quarter earnings surprise for FIVE is 70.1%, on average. The company’s expected earnings growth rate for the current year is 30.4%.
Marathon Petroleum Marathon Petroleum is a leading downstream energy company operating across the United States. It has a Momentum Score of B. The trailing four-quarter earnings surprise for MPC is 49.5%, on average. The company’s expected earnings growth rate for the current year is 180.8%.
Five Below (FIVE 1.92%) just delivered one of its strongest quarters in years, with same-store sales (SSS) up 23%, fueled by a 19% spike in traffic. Gross margins widened by nearly four percentage points, and earnings per share (EPS) more than doubled year over year.
By any measure, it was a blowout quarter that further legitimizes CEO Winnie Park's "social-first" marketing approach. Yet the stock fell roughly 14% following the news and hasn't recovered.
The company's execution has been impressive, but management's message reinforced investors' concerns about the broader economy. On the earnings call, management warned of "growing macro challenges and an increasingly cautious consumer," citing rising gas prices and persistent inflation.
Image source: Getty Images.
After notching 20%-plus SSS growth in the first quarter, management raised full-year guidance for EPS growth from 20% to 33%, but maintained its previous SSS growth projections for the back half of the year.
There's nothing squishy about its social media marketing approach Five Below's recent results are the product of a strategic overhaul led by the new CEO. There have been several changes, but the one having an outsize effect is its marketing focus on social media, creator content, and viral trends.
This new approach has rapidly grown the rate of new customer acquisition and traffic from brand loyalists. The Squishy Dumpling "event," where the company used social media to create scarcity and drive foot traffic for a new kids' trend, had a meaningful effect on results this quarter and will be a lever management will continue to pull moving forward.
The company also changed how it sells products. The separate "Five Beyond" section, which held higher-priced items, was recently eliminated. Meanwhile, the company has rolled out higher price points on select items, which are now integrated into the rest of the store. This move has lifted the average ticket size while keeping 80% of the store's merchandise at $5.00 or below.
Despite the business momentum, the market is focused on the road ahead. Five Below's core demographic of kids, teens, and their parents is sensitive to economic pressure. If inflation continues to weigh on discretionary spending, even five-dollar toys are at risk.
An off-price model with room to run For long-term investors, the dual growth story is compelling. The retailer's current footprint includes 1,970 stores, with a long-term target of more than 3,500 locations.
The store-level economics are attractive. New stores bring in $2 million in sales in their first year, on average, with a payback period of about one year on the initial investment. Management plans to open 150 net new locations this year.
A strong balance sheet supports this expansion. The company ended the last fiscal year with $1.1 billion in net cash and no debt. It also generated $412 million in free cash flow (FCF) last year, a jump from $107 million in the prior year as it lapped heavy investments in technology and distribution centers.
Today's Change
(
-1.92
%) $
-3.88
Current Price
$
198.09
This financial flexibility allows the company to self-fund its growth plans and navigate any near-term economic stress. At roughly 21 times this year's earnings, I think the stock is worth buying, but I'd keep some powder dry in case volatility picks up as the year progresses.
SG Americas Securities LLC raised its stake in Sylvamo Corporation (NYSE:SLVM – Free Report) by 2,246.7% in the 4th quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The institutional investor owned 223,568 shares of the company’s stock after purchasing an additional 214,041 shares during the period. SG Americas Securities LLC owned 0.57% of Sylvamo worth $10,765,000 as of its most recent SEC filing.
A number of other institutional investors and hedge funds also recently made changes to their positions in SLVM. Lazard Asset Management LLC increased its position in Sylvamo by 0.9% in the 2nd quarter. Lazard Asset Management LLC now owns 29,415 shares of the company’s stock valued at $1,473,000 after buying an additional 259 shares in the last quarter. Rhumbline Advisers boosted its holdings in Sylvamo by 0.3% in the third quarter. Rhumbline Advisers now owns 96,697 shares of the company’s stock worth $4,276,000 after acquiring an additional 278 shares in the last quarter. Versant Capital Management Inc boosted its holdings in Sylvamo by 328.3% in the third quarter. Versant Capital Management Inc now owns 681 shares of the company’s stock worth $30,000 after acquiring an additional 522 shares in the last quarter. GAMMA Investing LLC grew its stake in Sylvamo by 222.8% in the fourth quarter. GAMMA Investing LLC now owns 765 shares of the company’s stock valued at $37,000 after acquiring an additional 528 shares during the period. Finally, Wealth Enhancement Advisory Services LLC grew its stake in Sylvamo by 10.9% in the third quarter. Wealth Enhancement Advisory Services LLC now owns 5,606 shares of the company’s stock valued at $239,000 after acquiring an additional 553 shares during the period. Institutional investors own 91.16% of the company’s stock.
Analyst Ratings Changes A number of equities analysts have recently weighed in on SLVM shares. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Sylvamo in a research report on Wednesday, January 21st. Royal Bank Of Canada restated a “sector perform” rating and set a $53.00 price target on shares of Sylvamo in a research note on Thursday, December 18th. One equities research analyst has rated the stock with a Buy rating, two have given a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of “Hold” and a consensus target price of $56.00.
Check Out Our Latest Stock Analysis on Sylvamo
Sylvamo Price Performance SLVM stock opened at $40.20 on Monday. The company has a market capitalization of $1.59 billion, a P/E ratio of 12.33, a price-to-earnings-growth ratio of 0.47 and a beta of 0.96. The company has a debt-to-equity ratio of 0.79, a quick ratio of 0.92 and a current ratio of 1.50. Sylvamo Corporation has a 52-week low of $37.09 and a 52-week high of $68.42. The business has a 50-day simple moving average of $46.56 and a two-hundred day simple moving average of $46.11.
Sylvamo (NYSE:SLVM – Get Free Report) last issued its quarterly earnings data on Thursday, February 12th. The company reported $1.08 EPS for the quarter, topping the consensus estimate of $1.05 by $0.03. Sylvamo had a return on equity of 15.12% and a net margin of 3.94%.The firm had revenue of $890.00 million during the quarter, compared to the consensus estimate of $858.76 million. During the same period in the prior year, the business posted $1.96 earnings per share. The company’s quarterly revenue was down 8.2% compared to the same quarter last year. Research analysts expect that Sylvamo Corporation will post 7.45 EPS for the current fiscal year.
Sylvamo Dividend Announcement The business also recently declared a quarterly dividend, which will be paid on Tuesday, April 28th. Investors of record on Tuesday, April 7th will be given a $0.45 dividend. This represents a $1.80 dividend on an annualized basis and a yield of 4.5%. The ex-dividend date of this dividend is Tuesday, April 7th. Sylvamo’s dividend payout ratio is presently 55.21%.
Insider Buying and Selling In other Sylvamo news, SVP Rodrigo Davoli sold 3,250 shares of the firm’s stock in a transaction on Wednesday, March 4th. The stock was sold at an average price of $46.46, for a total transaction of $150,995.00. Following the transaction, the senior vice president directly owned 46,484 shares in the company, valued at approximately $2,159,646.64. This trade represents a 6.53% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Insiders own 0.74% of the company’s stock.
Sylvamo Profile (Free Report)
Sylvamo Corporation, trading on the New York Stock Exchange under the ticker SLVM, is a leading global producer of uncoated freesheet paper. The company was established in October 2021 through a spin-off from International Paper, creating an independent entity focused exclusively on the development, manufacturing and marketing of high-quality uncoated paper products. Headquartered in Memphis, Tennessee, Sylvamo draws on decades of industry experience inherited from its predecessor, positioning itself to meet evolving customer needs in paper-based communications and packaging applications.
The company’s core product portfolio includes office and digital print papers, direct mail and marketing materials, catalog and commercial printing papers, and a range of specialty and value-added grades.
Further Reading Five stocks we like better than Sylvamo Want to see what other hedge funds are holding SLVM? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Sylvamo Corporation (NYSE:SLVM – Free Report).
Receive News & Ratings for Sylvamo Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Sylvamo and related companies with MarketBeat.com's FREE daily email newsletter.
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The April 2026 GASV list highlights 14 fair-priced, 'safer' mid-to-large-cap value stocks with strong dividend profiles and positive free-cash-flow-yields. Top ten GASV stocks are projected to deliver average net gains of 43.98% by April 2027, with yields ranging from 7.47% to 13.59%. All top-ten GASV stocks are ideally priced, with dividends from $1K invested exceeding their share prices, though some financials fund dividends with borrowed money.
MEMPHIS, Tenn.--(BUSINESS WIRE)--Sylvamo (NYSE: SLVM), the world’s paper company, will release first quarter earnings before the market opens Friday, May 8.
The company will host an audio webcast at 10 a.m. EDT at investors.sylvamo.com.
To participate in Q&A, use the analyst registration to receive a unique passcode.
Replays will be available at investors.sylvamo.com for one year.
About Sylvamo
Sylvamo (NYSE: SLVM) is the world’s paper company with mills in Europe, Latin America and North America. Our vision is to be the employer, supplier and investment of choice. We transform renewable resources into papers that people depend on for education, communication and entertainment. Headquartered in Memphis, Tennessee, we employ more than 6,500 colleagues. Net sales for 2025 were $3.4 billion. For more information, please visit Sylvamo.com.
Sylvamo Corporation is rated Buy with a $50.70/share price target, reflecting a turnaround strategy for eFY27 after a transitional, capital-intensive period. SLVM faces a challenging eFY26 due to shifting production, importing European paper to service the North American market, and expecting to face higher tariff and freight costs. Significant capital projects, including $145mm in South Carolina, aim to add $50mm annual adjusted EBITDA by eFY27, while share repurchases are paused for financial flexibility.
State of Alaska Department of Revenue lessened its stake in shares of Sylvamo Corporation (NYSE:SLVM – Free Report) by 84.5% during the 4th quarter, according to its most recent filing with the Securities and Exchange Commission. The institutional investor owned 18,772 shares of the company’s stock after selling 102,334 shares during the quarter. State of Alaska Department of Revenue’s holdings in Sylvamo were worth $903,000 at the end of the most recent reporting period.
Several other institutional investors also recently bought and sold shares of SLVM. Nomura Holdings Inc. boosted its stake in Sylvamo by 34.1% in the third quarter. Nomura Holdings Inc. now owns 2,150,000 shares of the company’s stock valued at $95,073,000 after acquiring an additional 546,336 shares in the last quarter. Millennium Management LLC lifted its holdings in shares of Sylvamo by 3,945.8% during the third quarter. Millennium Management LLC now owns 316,380 shares of the company’s stock worth $13,990,000 after purchasing an additional 308,560 shares during the period. Canada Pension Plan Investment Board acquired a new stake in shares of Sylvamo in the second quarter worth $15,030,000. SG Americas Securities LLC lifted its holdings in shares of Sylvamo by 2,246.7% in the 4th quarter. SG Americas Securities LLC now owns 223,568 shares of the company’s stock valued at $10,765,000 after buying an additional 214,041 shares during the period. Finally, Bridgeway Capital Management LLC lifted its holdings in shares of Sylvamo by 334.1% in the 3rd quarter. Bridgeway Capital Management LLC now owns 273,496 shares of the company’s stock valued at $12,094,000 after buying an additional 210,496 shares during the period. 91.16% of the stock is currently owned by institutional investors and hedge funds.
Sylvamo Trading Up 0.1% Shares of SLVM stock opened at $42.40 on Thursday. The company has a debt-to-equity ratio of 0.79, a current ratio of 1.50 and a quick ratio of 0.92. The firm has a market cap of $1.69 billion, a PE ratio of 13.01, a price-to-earnings-growth ratio of 0.51 and a beta of 0.99. The company has a 50-day moving average of $43.69 and a two-hundred day moving average of $45.90. Sylvamo Corporation has a 1-year low of $37.09 and a 1-year high of $62.06.
Sylvamo (NYSE:SLVM – Get Free Report) last posted its earnings results on Thursday, February 12th. The company reported $1.08 earnings per share for the quarter, beating the consensus estimate of $1.05 by $0.03. Sylvamo had a net margin of 3.94% and a return on equity of 15.12%. The firm had revenue of $890.00 million during the quarter, compared to the consensus estimate of $858.76 million. During the same quarter last year, the firm earned $1.96 EPS. The firm’s revenue for the quarter was down 8.2% on a year-over-year basis. On average, analysts predict that Sylvamo Corporation will post 2.75 EPS for the current year.
Sylvamo Dividend Announcement The firm also recently declared a quarterly dividend, which will be paid on Tuesday, April 28th. Stockholders of record on Tuesday, April 7th will be given a dividend of $0.45 per share. This represents a $1.80 annualized dividend and a dividend yield of 4.2%. The ex-dividend date of this dividend is Tuesday, April 7th. Sylvamo’s dividend payout ratio is currently 55.21%.
Insider Activity at Sylvamo In other Sylvamo news, SVP Rodrigo Davoli sold 3,250 shares of the business’s stock in a transaction on Wednesday, March 4th. The shares were sold at an average price of $46.46, for a total value of $150,995.00. Following the completion of the transaction, the senior vice president owned 46,484 shares in the company, valued at $2,159,646.64. The trade was a 6.53% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at the SEC website. 0.81% of the stock is currently owned by company insiders.
Analyst Ratings Changes SLVM has been the topic of several analyst reports. Weiss Ratings restated a “hold (c)” rating on shares of Sylvamo in a research report on Wednesday, January 21st. Truist Financial initiated coverage on Sylvamo in a research note on Monday, March 30th. They issued a “buy” rating and a $54.00 price target on the stock. Finally, Royal Bank Of Canada set a $50.00 target price on Sylvamo in a report on Thursday, April 16th. Two research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, the stock has a consensus rating of “Hold” and an average target price of $54.33.
Get Our Latest Stock Analysis on Sylvamo
Sylvamo Profile (Free Report)
Sylvamo Corporation, trading on the New York Stock Exchange under the ticker SLVM, is a leading global producer of uncoated freesheet paper. The company was established in October 2021 through a spin-off from International Paper, creating an independent entity focused exclusively on the development, manufacturing and marketing of high-quality uncoated paper products. Headquartered in Memphis, Tennessee, Sylvamo draws on decades of industry experience inherited from its predecessor, positioning itself to meet evolving customer needs in paper-based communications and packaging applications.
The company’s core product portfolio includes office and digital print papers, direct mail and marketing materials, catalog and commercial printing papers, and a range of specialty and value-added grades.
Featured Stories Five stocks we like better than Sylvamo Want to see what other hedge funds are holding SLVM? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Sylvamo Corporation (NYSE:SLVM – Free Report).
Receive News & Ratings for Sylvamo Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Sylvamo and related companies with MarketBeat.com's FREE daily email newsletter.
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The market expects Sylvamo Corporation (SLVM - Free Report) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended March 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on May 8, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus EstimateThis company is expected to post quarterly loss of $0.25 per share in its upcoming report, which represents a year-over-year change of -136.8%.
Revenues are expected to be $716 million, down 12.8% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 4.62% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Sylvamo?For Sylvamo, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination makes it difficult to conclusively predict that Sylvamo will beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Sylvamo would post earnings of $1.05 per share when it actually produced earnings of $1.08, delivering a surprise of +2.86%.
Over the last four quarters, the company has beaten consensus EPS estimates just once.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Sylvamo doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
MEMPHIS, Tenn.--(BUSINESS WIRE)--Sylvamo (NYSE: SLVM), the world’s paper company, is releasing first quarter earnings. The company will host an audio webcast at 10 a.m. EDT at investors.sylvamo.com.
Management Summary from Chief Executive Officer John Sims
2026 continues to be a transition year as we work through some short-term capacity constraints due to the termination of the Riverdale supply agreement at the end of April and an upcoming extended outage at our Eastover, South Carolina, mill as we execute our strategic investments.
Our high-return strategic investments at Eastover are on track. The paper machine optimization project is scheduled for completion during a planned maintenance outage in the fourth quarter. The new cutsize sheeter is also on schedule and will be installed in the third quarter, ramping up in the fourth quarter. The hardwood line of the woodyard modernization project is running and already showing improved chip quality, and we expect to see improved yield moving forward. The softwood operation is expected to start up in the first quarter of 2027.
To serve our most valuable customers in the U.S. during this transition, we started importing from our mills in Europe, converting product using third-party vendors and building inventory. This resulted in lower sales volume and incremental costs in the first quarter. Changes in U.S. global tariff rates in late February prompted us to revise our plans and begin bringing product in from our operations in Brazil while ramping down imports from our Europe operations. We expect this to benefit Sylvamo by reducing the 2026 North America footprint transition costs by approximately $20 million at current tariff rates.
The first quarter played out largely as we anticipated with the exception of some reliability issues in Europe and Latin America. The root causes have mostly been corrected or will be during the upcoming annual outages. In the first quarter, we began implementing previously communicated uncoated freesheet paper price increases to customers across all our regions. We started to see the benefits of these increases in the first quarter in North America and Latin America and will continue to see realization of these increases across all regions into the second quarter.
Sylvamo generated a net loss of $3 million and adjusted EBITDA* of $29 million, representing a 4% margin. Cash used for operating activities was $10 million, and free cash flow* was negative $59 million.
As anticipated, free cash flow was lower than the fourth quarter, due to lower earnings, unfavorable impacts of our inventory build, the timing of payments and the payment of annual incentive compensation in the first quarter. These were partially offset by favorable cash collections related to Latin America’s seasonally higher fourth quarter sales.
Our free cash flow is heavily weighted to the second half of the year. In the last few years, we generated the vast majority of our free cash flow in the second half, and we expect to do so again this year.
-Capital Allocation
Our board of directors declared a $0.45 dividend for the second quarter, which we paid April 28.
We refinanced debt due in 2027 to extend our maturity profile, which allows us to navigate the current uncertain environment without changing our long-term approach to capital allocation.
Our capital allocation philosophy has not changed. We will deploy every dollar with the goal of improving our competitive position and delivering the best possible shareowner returns over time. We plan to maintain a strong financial position, reinvest in our business and return cash to shareowners.
-Regional Business Conditions
In Europe, industry supply and demand remain challenging. Pulp prices improved throughout the first quarter, and we are realizing previously communicated paper price increases in April. We have communicated a second paper price increase effective in May and expect the realization to occur through the second and third quarters. In Latin America, we moved from the seasonally strongest demand in the fourth quarter to the seasonally weakest in the first quarter, but now expect demand to increase each quarter this year. We are realizing the previously communicated paper price increases to our customers in Brazil, export customers across other Latin American countries as well as customers in the Middle East and Africa. We have communicated a second paper price increase effective in April to our customers across other Latin American countries as well as customers in the Middle East and Africa. We should continue to see additional realization in these regions through the second quarter. In North America, industry supply and demand dynamics have improved as roughly 7% of the annual uncoated freesheet industry supply was removed with the Riverdale mill conversion. After peaking in June 2025, imports into North America have declined significantly throughout the second half of last year and into the first quarter. We also began realizing previously communicated paper price increases to our customers and expect to see additional realization through the second quarter. Our business is currently experiencing increasing energy, chemical, diesel and ocean freight costs due to the Middle East conflict and we expect the pressure to continue. We are focusing on what we can control across our regions to reduce costs and taking commercial actions to help offset the impacts.
-Looking Ahead
We are transforming Sylvamo into a lean, employee-driven, continuous improvement culture. Lean is a long-term, company-wide transformation focused on maximizing customer value by eliminating waste, improving performance, strengthening customer experience and achieving operational excellence and cost leadership over time. We kicked off our lean transformation in Latin America in the first quarter and will begin our efforts in North America in the second quarter.
We are focused on long-term value creation by making disciplined, data-driven decisions that position us for sustainable success and strengthen Sylvamo for decades to come. As industry conditions turn, our capital spending normalizes and the benefits from our investments begin to materialize, we have the potential to generate annually:
> $300 million in free cash flow > 15% return on invested capital Earnings Webcast
The company will host an audio webcast at 10 a.m. EDT at investors.sylvamo.com.
To participate in Q&A, use the analyst registration to receive a unique passcode.
Replays will be available at investors.sylvamo.com for one year.
About Sylvamo
Sylvamo Corporation (NYSE: SLVM) is the world's paper company with mills in Europe, Latin America and North America. Our vision is to be the employer, supplier and investment of choice. We transform renewable resources into papers that people depend on for education, communication and entertainment. Headquartered in Memphis, Tennessee, we employ more than 6,500 colleagues. Net sales for 2025 were $3.4 billion. For more information, please visit Sylvamo.com.
Select Financial Measures
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First
Quarter
2026
Fourth
Quarter
2025
First
Quarter
2025
Net Sales
$
755
$
890
$
821
Net Income (Loss)
(3
)
33
27
Business Segment Operating Profit (Loss)
(15
)
79
44
Adjusted Operating Earnings (Loss)
(21
)
43
28
Adjusted EBITDA
29
125
90
Cash Provided By (Used For) Operating Activities
(10
)
94
23
Free Cash Flow
(59
)
38
(25
)
Segment Information
Sylvamo uses business segment operating profit (loss) to measure the earnings performance of its businesses and is calculated as set forth in footnote (d) under the "Sales and Earnings by Business Segment" table (page 7). First quarter 2026 net sales by business segment and operating profit (loss) by business segment compared with the fourth quarter of 2025 and the first quarter of 2025 are as follows:
Business Segment Results
(In millions)
First
Quarter
2026
Fourth
Quarter
2025
First
Quarter
2025
Net Sales by Business Segment
Europe
$
190
$
186
$
190
Latin America
187
270
199
North America
390
447
438
Inter-segment Sales
(12
)
(13
)
(6
)
Net Sales
$
755
$
890
$
821
Operating Profit (Loss) by Business Segment
Europe
$
(44
)
$
(29
)
$
(24
)
Latin America
4
37
26
North America
25
71
42
Business Segment Operating Profit (Loss)
$
(15
)
$
79
$
44
Operating profits in the first quarter of 2026:
Europe - $(44) million compared with $(29) million in the fourth quarter of 2025. Losses were higher due to lower sales price and mix and higher operating and input costs.
Latin America - $4 million compared with $37 million in the fourth quarter of 2025. Earnings were lower due to lower sales mix, lower volumes, higher operating costs and higher planned maintenance outages.
North America - $25 million compared with $71 million in the fourth quarter of 2025. Earnings were lower due to lower volumes, lower sales mix and higher operating and input costs which more than offset lower planned maintenance outages.
Effective Tax Rate
The reported effective tax rate for the first quarter of 2026 was 50%, compared to 43% for the fourth quarter of 2025. The higher rate for the first quarter was due to the mix of earnings in our regions.
The effective operational tax rate for the first quarter of 2026 was 13%, compared with 36% for the fourth quarter of 2025.
The effective operational tax rate is a non-GAAP financial measure and is calculated by adjusting the income tax provision (benefit) and rate to exclude the tax effect at the applicable statutory rate of net special items and the impact of foreign exchange on a note receivable from our Brazilian subsidiary. Management believes that this presentation provides useful information to investors by providing a more meaningful comparison of the income tax rate between past and present periods.
Effects of Net Special Items
Net special items in the first quarter of 2026 amounted to a net after-tax charge of $1 million ($0.03 per diluted share), compared with a net after-tax charge of $11 million ($0.27 per diluted share) in the fourth quarter of 2025.
Non-GAAP Financial Measures
Adjusted Operating Earnings (Loss) (non-GAAP) are net income (loss) (GAAP), net of tax, plus the impact of foreign exchange on a note receivable from our Brazilian subsidiary and net special items. Management uses this measure to focus on ongoing operations and believes it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. The Company believes that using this information, along with net income (loss), provides for a more complete analysis of the results of operations. Net income (loss) is the most directly comparable GAAP measure. For more information regarding net special items, see the information under the heading Effects of Net Special Items and the Consolidated Statement of Operations and related notes included later in this release.
Adjusted EBITDA (non-GAAP) is net income (loss) (GAAP), net of tax, plus the sum of income taxes, net interest expense, depreciation, amortization and cost of timber harvested, stock-based compensation, the impact of foreign exchange on a note receivable from our Brazilian subsidiary, and, when applicable for the periods reported, net special items. Management uses this measure in managing the operating performance of our business and believes that Adjusted EBITDA and Adjusted EBITDA Margin provide investors and analysts meaningful insights into our operating performance and Adjusted EBITDA is a relevant metric for the third-party debt. The Company believes that using this information, along with net income (loss), provides for a more complete analysis of the results of its operations. Net income (loss) is the most directly comparable GAAP measure. For more information regarding net special items, see the information under the heading Effects of Net Special Items and the Consolidated Statement of Operations and related notes included later in this release.
Free Cash Flow is a non-GAAP measure and the most directly comparable GAAP measure is cash provided by operating activities. Management utilizes this measure in connection with managing our business and believes that Free Cash Flow is useful to investors as a liquidity measure because it measures the amount of cash generated that is available, after reinvesting in the business, to maintain a strong balance sheet and service debt, and return cash to shareowners. It should not be inferred that the entire Free Cash Flow amount is available for discretionary expenditures. Free Cash Flow also enables investors to perform meaningful comparisons between past and present periods.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including the information under the heading "Management Summary from Chief Executive Officer John Sims." Any or all forward-looking statements may turn out to be incorrect, and our actual actions and results could differ materially from what they express or imply, because they involve known and unknown risks, uncertainties and other factors, many of which are beyond our control. These risks, uncertainties, and other factors include those disclosed in the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended Dec. 31, 2025, filed with the U.S. Securities and Exchange Commission (SEC) and in our subsequent filings with the SEC, available on our website, Sylvamo.com. These forward-looking statements reflect our current expectations, and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
SYLVAMO CORPORATION
Consolidated Statement of Operations
Preliminary and Unaudited
(In millions, except per share amounts)
Three Months Ended
March 31,
Three Months Ended
December 31,
2026
2025
2025
NET SALES
$
755
$
821
$
890
COSTS AND EXPENSES
Cost of products sold (exclusive of depreciation, amortization and cost of timber harvested shown separately below)
630
662
690
Selling and administrative expenses
73
(a)
73
(b)
68
Depreciation, amortization and cost of timber harvested
41
40
45
Taxes other than payroll and income taxes
8
4
7
Interest expense, net
9
9
11
Impairment of goodwill
—
—
11
(c)
INCOME (LOSS) BEFORE INCOME TAXES
(6
)
33
58
Income tax provision (benefit)
(3
)
6
25
NET INCOME (LOSS)
$
(3
)
$
27
$
33
EARNINGS (LOSS) PER SHARE
Basic
$
(0.08
)
$
0.66
$
0.84
Diluted
$
(0.08
)
$
0.65
$
0.83
Average Shares of Common Stock Outstanding - Diluted
40
41
40
The accompanying notes are an integral part of this consolidated statement of operations.
Three Months Ended March 31, 2026 (a) Includes a pre-tax loss of $1 million ($1 million after taxes) for other charges.
Three Months Ended March 31, 2025 (b) Includes a pre-tax loss of $1 million ($1 million after taxes) related to the termination of the Georgetown mill offtake agreement and a pre-tax loss of $1 million ($0 million after taxes) related to environmental reserves in Brazil.
Three Months Ended December 31, 2025 (c) Includes a pre-tax loss of $11 million ($11 million after taxes) related to the impairment of goodwill in our France reporting unit.
SYLVAMO CORPORATION
Reconciliation of Net Income (Loss) to Adjusted Operating Earnings (Loss)
Preliminary and Unaudited
(In millions, except per share amounts)
Three Months Ended
March 31,
Three Months Ended
December 31,
2026
2025
2025
Net Income (Loss)
$
(3
)
$
27
$
33
Add back: Net special items expense
1
1
11
Add back: Foreign exchange gain on intercompany note
(19
)
—
(1
)
Adjusted Operating Earnings (Loss)
$
(21
)
$
28
$
43
Three Months Ended
March 31,
Three Months Ended
December 31,
2026
2025
2025
Diluted Earnings (Loss) Per Common Share as Reported
$
(0.08
)
$
0.65
$
0.83
Add back: Net special items expense
0.03
0.03
0.27
Add back: Foreign exchange gain on intercompany note
(0.48
)
—
(0.02
)
Adjusted Operating Earnings (Loss) Per Share
$
(0.53
)
$
0.68
$
1.08
SYLVAMO CORPORATION
Sales and Earnings by Business Segment
Preliminary and Unaudited
(In millions)
Net Sales by Business Segment
Three Months Ended
March 31,
Three Months Ended December 31,
2026
2025
2025
Europe
$
190
$
190
$
186
Latin America
187
199
270
North America
390
438
447
Inter-segment Sales
(12
)
(6
)
(13
)
Net Sales
$
755
$
821
$
890
Operating Profit (Loss) by Business Segment
Three Months Ended
March 31,
Three Months Ended
December 31,
2026
2025
2025
Europe
$
(44
)
$
(24
)
$
(29
)
Latin America
4
26
37
North America
25
42
71
Business Segment Operating Profit (Loss)
$
(15
)
$
44
$
79
Income (Loss) Before Income Taxes
$
(6
)
$
33
$
58
Interest expense, net
9
9
11
Foreign exchange gain on intercompany note
(19
)
—
(1
)
Net special items expense
1
(a)
2
(b)
11
(c)
Business Segment Operating Profit (Loss) (d)
$
(15
)
$
44
$
79
Three Months Ended March 31, 2026
(a)
Includes a pre-tax loss of $1 million ($1 million after taxes) for other charges.
Three Months Ended March 31, 2025
(b)
Includes a pre-tax loss of $1 million ($1 million after taxes) related to the termination of the Georgetown mill offtake agreement and a pre-tax loss of $1 million ($0 million after taxes) related to environmental reserves in Brazil.
Three Months Ended December 31, 2025
(c)
Includes a pre-tax loss of $11 million ($11 million after taxes) related to the impairment of goodwill in our France reporting unit.
(d)
As set forth in the chart above, business segment operating profit (loss) is defined as income (loss) before income taxes, but excluding net interest expense, the impact of foreign exchange on a note receivable from our Brazilian subsidiary and net special items. Business segment operating profit is a measure reported to our management for purposes of making decisions about allocating resources to our business segments and assessing the performance of our business segments.
Reconciliation of Net Income (Loss) to Adjusted EBITDA and Adjusted EBITDA Margin
Preliminary and Unaudited
(In millions)
Three Months Ended
March 31,
Three Months Ended
December 31,
2026
2025
2025
Net Income (Loss)
$
(3
)
$
27
$
33
Adjustments:
Income tax provision (benefit)
(3
)
6
25
Interest expense, net
9
9
11
Depreciation, amortization and cost of timber harvested
41
40
45
Stock-based compensation
3
6
1
Foreign exchange gain on intercompany note
(19
)
—
(1
)
Net special items expense
1
2
11
Adjusted EBITDA
$
29
$
90
$
125
Net Sales
$
755
$
821
$
890
Adjusted EBITDA Margin
4
%
11
%
14
%
Adjusted EBITDA and Adjusted EBITDA Margin by Business Segment
Three Months Ended
March 31,
Three Months Ended
December 31,
2026
2025
2025
Adjusted EBITDA
Europe
$
(36
)
$
(15
)
$
(22
)
Latin America
26
46
58
North America
39
59
89
Total Business Segment Adjusted EBITDA
$
29
$
90
$
125
Net Sales (excluding inter-segment sales eliminations)
Europe
$
190
$
190
$
186
Latin America
187
199
270
North America
390
438
447
Total Business Segment Net Sales
$
767
$
827
$
903
Adjusted EBITDA Margin
Europe
(19
)%
(8
)%
(12
)%
Latin America
14
%
23
%
21
%
North America
10
%
13
%
20
%
SYLVAMO CORPORATION
Consolidated Balance Sheet
Preliminary and Unaudited
(In millions)
March 31,
2026
December 31,
2025
ASSETS
Current Assets
Cash and temporary investments
$
130
$
135
Accounts and notes receivable
378
424
Contract assets
20
19
Inventories
483
418
Other current assets
86
80
Total Current Assets
1,097
1,076
Plants, Properties and Equipment, net
1,064
1,047
Forestlands
389
364
Goodwill
121
114
Right of Use Assets
54
48
Deferred Charges and Other Assets
109
114
TOTAL ASSETS
$
2,834
$
2,763
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable
$
407
$
381
Notes payable and current maturities of long-term debt
155
90
Accrued payroll and benefits
56
55
Other current liabilities
140
190
Total Current Liabilities
758
716
Long-Term Debt
766
763
Deferred Income Taxes
179
175
Other Liabilities
152
143
Equity
Common stock $1.00 par value, 200.0 shares authorized, 46.0 shares and 45.6 shares issued and 39.7 shares and 39.4 shares outstanding at March 31, 2026 and December 31, 2025, respectively
46
46
Paid-in capital
93
89
Retained earnings
2,493
2,514
Accumulated other comprehensive loss
(1,317
)
(1,353
)
1,315
1,296
Less: Common stock held in treasury, at cost, 6.2 shares and 6.2 shares at March 31, 2026 and December 31, 2025, respectively
(336
)
(330
)
Total Equity
979
966
TOTAL LIABILITIES AND EQUITY
$
2,834
$
2,763
SYLVAMO CORPORATION
Consolidated Statement of Cash Flows
Preliminary and Unaudited
(In millions)
Three Months Ended
March 31,
2026
2025
OPERATING ACTIVITIES
Net income (loss)
$
(3
)
$
27
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation, amortization and cost of timber harvested
41
40
Deferred income tax provision (benefit), net
(4
)
—
Stock-based compensation
3
6
Foreign exchange gain on intercompany note
(19
)
—
Changes in operating assets and liabilities and other
Accounts and notes receivable
54
30
Inventories
(56
)
4
Accounts payable and accrued liabilities
(23
)
(63
)
Other
(3
)
(21
)
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
(10
)
23
INVESTMENT ACTIVITIES
Invested in capital projects
(49
)
(48
)
CASH USED FOR INVESTING ACTIVITIES
(49
)
(48
)
FINANCING ACTIVITIES
Dividends paid
(18
)
(18
)
Issuance of debt
114
23
Reduction of debt
(47
)
(11
)
Repurchases of common stock
—
(20
)
Other
4
(5
)
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
53
(31
)
Effect of Exchange Rate Changes on Cash
1
5
Change in Cash and Temporary Investments
(5
)
(51
)
Cash and Temporary Investments
Beginning of the period
135
205
End of the period
$
130
$
154
SYLVAMO CORPORATION
Reconciliation of Cash Provided by Operations to Free Cash Flow
Sylvamo Corporation (SLVM - Free Report) came out with a quarterly loss of $0.53 per share versus the Zacks Consensus Estimate of a loss of $0.25. This compares to earnings of $0.68 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -116.33%. A quarter ago, it was expected that this company would post earnings of $1.05 per share when it actually produced earnings of $1.08, delivering a surprise of +2.86%.
Over the last four quarters, the company has surpassed consensus EPS estimates just once.
Sylvamo, which belongs to the Zacks Paper and Related Products industry, posted revenues of $755 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 5.45%. This compares to year-ago revenues of $821 million. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Sylvamo shares have lost about 9.2% since the beginning of the year versus the S&P 500's gain of 7.2%.
What's Next for Sylvamo?While Sylvamo has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Sylvamo was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.68 on $830 million in revenues for the coming quarter and $2.75 on $3.32 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Paper and Related Products is currently in the bottom 12% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the broader Zacks Basic Materials sector, Avino Silver (ASM - Free Report) , has yet to report results for the quarter ended March 2026. The results are expected to be released on May 13.
This company is expected to post quarterly earnings of $0.07 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Avino Silver's revenues are expected to be $35.1 million, up 86.3% from the year-ago quarter.
MEMPHIS, Tenn.--(BUSINESS WIRE)--Sylvamo's (NYSE: SLVM) board of directors declared a quarterly dividend of $0.45 per share for the period of July 1, 2026, to Sept. 30, 2026. The dividend is payable July 28, 2026, to holders of record at the close of business July 7, 2026.
About Sylvamo
Sylvamo (NYSE: SLVM) is the world’s paper company with mills in Europe, Latin America and North America. Our vision is to be the employer, supplier and investment of choice. We transform renewable resources into papers that people depend on for education, communication and entertainment. Headquartered in Memphis, Tennessee, we employ more than 6,500 colleagues. Net sales for 2025 were $3.4 billion. For more information, please visit Sylvamo.com.
Sylvamo NYSE: SLVM reported first-quarter 2026 results that management described as largely in line with expectations, excluding operational reliability issues in Europe and Brazil that weighed on earnings and are expected to create some additional costs in the second quarter.
MEMPHIS, Tenn.--(BUSINESS WIRE)---- $SLVM #TheWorldsPaperCo--Sylvamo (NYSE: SLVM), the world's paper company, will host individual meetings Tuesday, June 2, during the Stifel Boston Cross Sector 1x1 Conference in Boston, Massachusetts. Don Devlin, senior vice president and chief financial officer, will be in attendance. About Sylvamo Sylvamo (NYSE: SLVM) is the world's paper company with mills in Europe, Latin America and North America. Our vision is to be the employer, supplier and investment of choice. We transform rene.
MEMPHIS, Tenn.--(BUSINESS WIRE)---- $SLVM #TheWorldsPaperCo--Sylvamo (NYSE: SLVM), the world's paper company, will host individual meetings Wednesday, June 17, during the Truist Securities Industrials and Services Conference in New York, New York. John Sims, chief executive officer, and Don Devlin, senior vice president and chief financial officer, will be in attendance. About Sylvamo Sylvamo (NYSE: SLVM) is the world's paper company with mills in Europe, Latin America and North America. Our vision is to be the employer,.
Just yesterday, AMD shares exploded by more than $50 per share on strong earnings. And while the stock is taking a breather today, AMD could see further upside. That’s because of a surge in demand for CPUs, driven by the growth of agentic AI, according to AMD CEO Lisa Su.
CEO Su revised the company’s estimates to exceed 35% growth each year, with the market topping $120 billion by the end of the decade. Better, Goldman Sachs just hiked its price target on AMD from $240 to $250, with a buy rating.
The major indices are pushing even higher on hopes that the war with Iran is coming to an end – again. At the moment, there’s reportedly a one-page, 14-point memorandum of understanding that could end the war and establish a framework for more detailed nuclear talks. Iran is reportedly reviewing that proposal.
With that, the S&P 500 is up another 0.17%, or by 13 points. The SPDR S&P 500 ETF (SPY) is up 0.16%, or by $1.21. The Dow is up 0.25%, or by 120 points. The Nasdaq is up 0.1%, or by 32 points. Oil is down by $4.86 at $90.22. Gold is up by nearly $60 at $4,743, as Bitcoin drops by about $273 to $81,165.24.
AI Bull Market Has Another Year or Two to Run That’s according to Paul Tudor Jones, who said “recent advances in AI resemble the emergence of transformative technologies such as Microsoft’s early software dominance in the 1980s and the commercialization of the internet in the mid-1990s, periods that ushered in years of productivity gains and market upside,” as noted by CNBC.
“Those were both the beginning of productivity miracles that lasted four to five and a half years,” Jones added, “We’re kind of, I’d say, 50 or 60%. If I had to pick a period, we’ve got another year or two to run.”
Market Movers: Alcoa is on fire, says Wells Fargo Investors may want to keep an eye on aluminum stocks, like Alcoa (NYSE: AA | AA Price Prediction), says Wells Fargo. The firm, which has an overweight rating on the stock and a $70 price target, still believes the s strength of the aluminum market is still being underappreciated.
“Our upgrade reflects conviction of sticky aluminum price strength that can exceed our forecasts. We also see catalysts from monetizing idled assets for data center conversion, as mgmt has noted several deals in the works, plus capital deployment news from strong profits,” said the firm, as quoted by CNBC.
Goldman Sachs just reiterated a buy on Nvidia (NASDAQ: NVDA), saying that it expects to see a beat and raise quarter. “We expect investors to focus on: (1) the magnitude of upside to Nvidia’s $1 trillion datacenter guidance at GTC; (2) potential upside from agentic AI to the server CPU business; (3) competitive dynamics; (4) gross margin outlook given rising input costs,” added the firm.
And analysts at Evercore just reiterated an outperform rating on Apple (NASDAQ: AAPL), noting that the tech giant’s supply chain is robust. The firm has a price target of $330 on Apple.
Key Takeaways Alcoa's Aluminum segment sales rose to $2.54B in Q1 2026 from $1.91B a year ago.AA benefits from higher aluminum prices tied to Middle East trade disruptions and U.S. tariffs.Alcoa expects 2026 aluminum production of 2.4-2.6M tons and shipments of 2.6M-2.8M tons. Alcoa Corporation (AA - Free Report) continues to benefit from strength in its Aluminum segment, driven by solid demand across packaging, electrical and transportation markets. The segment’s production capacity has increased following the restart of the San Ciprián smelter in Spain, Alumar in Brazil and Lista in Norway. In the first-quarter 2026, Aluminum segment’s third-party sales increased to $2.54 billion, from $1.91 billion reported in the year-ago quarter
Demand for aluminum has grown over the years, with increasing adoption of lighter and energy-efficient electric vehicles, recycled aluminum and rechargeable batteries. Alcoa is also benefiting from higher aluminum prices driven by the Middle East conflict, which has disrupted trade flows through the Strait of Hormuz. This has tightened aluminum supply in the region, driving up global aluminum prices.
Alcoa is also benefiting from U.S. tariffs on imported aluminum, which have strengthened domestic market conditions. In June 2025, the U.S. administration increased tariffs on imported aluminum to 50% as a measure to correct trade imbalances and boost the domestic industry. The move has also increased aluminum prices, thereby benefiting domestic producers like Alcoa. For first-quarter 2026, aluminum product sales increased to $2.58 billion from $1.96 billion in the prior-year quarter.
Against this backdrop, the company issued a solid outlook for the Aluminum segment. For 2026, aluminum production is projected in the range of 2.4-2.6 million tons, while shipments are expected to be between 2.6 million and 2.8 million tons. The segment is expected to remain the company’s primary business catalyst in the near term.
Snapshot of AA's PeersAmong its peers, Constellium SE (CSTM - Free Report) is gaining from strength in the Packaging & Automotive Rolled Products segment. In the first quarter of 2026, revenues from Constellium’s segment increased 24% year over year, supported by higher metal prices. However, Constellium’s segment’s shipments decreased 3% year over year due to lower shipments of rolled packaging products.
Ryerson Holding Corporation’s (RYZ - Free Report) first-quarter 2026 revenues increased more than 30% year over year, driven by higher volumes following the merger with Olympic Steel. Improved selling prices amid stronger metal prices and demand conditions are also aiding Ryerson. Ryerson's average selling prices rose across all product categories, led by aluminum plate, aluminum flat and aluminum long products.
AA’s Price Performance, Valuation and EstimatesShares of Alcoa have gained 124.7% in the past year, in line with the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, AA is trading at a forward price-to-earnings ratio of 7.96X, below the industry’s average of 8.49X. Alcoa carries a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AA’s 2026 earnings has increased 53.2% over the past 60 days.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PITTSBURGH--(BUSINESS WIRE)--Alcoa Corporation (NYSE: AA, ASX: AAI) (“Alcoa” or the “Company”), today announced a $65 million investment to expand foundry production capabilities to include recycled content in the casting process at its Mosjøen smelter in Norway.
The investment provides strategic benefits to the Company by further delivering low-carbon aluminum products that our customers demand in a key market, while incorporating post consumer recycled aluminum into its products for the first time.
Since 2020, Alcoa has invested approximately $180 million in sustaining and return-seeking capital projects at the smelter. This additional investment of $65 million will expand and upgrade the Mosjøen casthouse, increasing production capacity by up to 75,000 metric tons.
The investment reflects Alcoa’s response to evolving customer requirements, including recycled‑content expectations in the automotive and packaging sectors, while strengthening its competitive position in Europe.
The investment introduces a new open mold foundry casting line, melting furnaces and additional casthouse improvements that will enable Mosjøen to increase production capacity. The upgrade will also enable a broader foundry alloy portfolio, offering greater flexibility in ingot size and format, expanded alloy diversity, and enhanced recycled content capabilities.
“This investment places Alcoa at the forefront of delivering low-carbon aluminum while creating long-term value for our customers and shareholders,” Alcoa President and CEO, William F. Oplinger. “The increased capacity, combined with recycling capabilities, positions Mosjøen as a cornerstone of low-carbon aluminum supply across Europe.”
Mosjøen is one of the largest industrial employers in Northern Norway, with more than 700 direct employees and significant regional impact. The investment will help secure long-term activity, jobs and expertise in the Helgeland region, while also supporting local suppliers and contributing to broader industrial value creation in Norway. As a key part of the European aluminum value chain, Mosjøen plays an important role in delivering materials to the EU market.
Stable and predictable framework conditions, including competitive long-term power arrangements, underpin the site’s competitiveness and support continued investment.
The upgrade project is expected to be completed in phases, with commissioning and ramp-up scheduled to progress throughout 2028.
About Alcoa Corporation
Alcoa (NYSE: AA, ASX: AAI) is a global industry leader in bauxite, alumina, and aluminum products with a vision to build a legacy of excellence for future generations. With a values-based approach that encompasses integrity, operating excellence, care for people and leading with courage, our purpose is to Turn Raw Potential into Real Progress. Since developing the process that made aluminum an affordable and vital part of modern life, our talented Alcoans have developed breakthrough innovations and best practices that have led to greater efficiency, safety, sustainability and stronger communities wherever we operate.
Dissemination of Company Information
Alcoa intends to make future announcements regarding company developments and financial performance through its website, www.alcoa.com, as well as through press releases, filings with the Securities and Exchange Commission, conference calls, media broadcasts, and webcasts. Alcoa does not incorporate the information contained on, or accessible through, its corporate website or such other websites or platforms referenced herein into this press release.
Cautionary Statement on Forward-Looking Statements
This press release contains statements that relate to future events and expectations relating to a capital investment and the expected impact and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as “aims,” “ambition,” “anticipates,” “believes,” “could,” “develop,” “endeavors,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “outlook,” “plans,” “potential,” “projects,” “reach,” “seeks,” “sees,” “should,” “strive,” “targets,” “will,” “working,” “would,” or other words of similar meaning. All statements by Alcoa Corporation that reflect expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and changes in circumstances that are difficult to predict. Although Alcoa Corporation believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that these expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Factors which could cause actual results to differ from such forward-looking statements include, but are not limited to, industry, global, economic and other conditions. Additional information concerning factors that could cause actual results to differ materially from those projected in the forward-looking statements is contained in Alcoa Corporation’s filings with the Securities and Exchange Commission. Alcoa Corporation disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.
On May 11, 2026, Alcoa Corp (AA) shares rose 3.4% today, with the current price at $65.34. The stock has experienced a 52-week range of $25.78 to $75.70, highli
On May 12, 2026, Alcoa Corp (AA) shares rose 7.0% to a current price of $67.62. This move comes as part of a volatile price performance, with the stock trading
Despite elevated aluminum production costs and shipment timing issues, Alcoa (AA) is strongly capitalizing on structurally higher prices.
LME aluminum has recently surged to four-year highs, driven by geopolitical tensions in the Middle East and a tightening global supply balance. This favorable macro pricing environment creates a compelling opportunity for a buy-write (covered call) strategy to optimize returns while managing cyclical volatility.
Some have described the buy-write strategy as the gateway trade for many new options traders. It allows you to buy a stock for less in exchange for capping your upside by selling an upside call.
The Strategy:June $70 Buy-Write.Buy the shares around $62.50Sell the June $70 strike calls at $1.80Max Loss: $6070Max Gain: $930Skill Level: Beginner Executing a buy-write on AA allows investors to capture premium from the stock's elevated implied volatility. Simultaneously buying Alcoa shares and selling an out-of-the-money call option provides immediate income. This premium effectively enhances Alcoa's modest $0.10-per-quarter dividend, establishing a solid "positive carry" that lowers the net cost basis and provides a modest buffer, particularly if one rolls the covered call position consistently, against near-term downside.
If the stock goes nowhere, you keep that $1.80 in premium, creating a synthetic yield. If the stock falls, that $1.80 in collected premium acts as a buffer, so in this case, losses wouldn't kick in until $60.70 ($62.50 stock price less the $1.80 collected). If Alcoa rises above $70 by June expiration, your stock will be called away, but you will have collected the $1.80 and made a tidy 12% on the stock portion of the trade.
Aluminum futures, 5 years
The bull caseDriven by supply shocks, a sequential increase in realized primary aluminum prices boosted Alcoa's Aluminum segment EBITDA, and management reaffirmed its full-year 2026 production and shipment guidance. The company is actively investing $65 million in its low-carbon Mosjøen smelter in Norway while simultaneously using cash to fully redeem $219 million of expensive debt, thereby strengthening the balance sheet.
The company targets reducing debt from the current $2.5 billion to between $1 billion and $1.5 billion. (Note that the company had approximately $2.8 billion in cash as of the March 31st earnings report and is expected to generate $813 million in free cash flow for FY2027).
The bear case While the metal side is booming, Alcoa's Alumina segment recorded negative EBITDA of $40 million due to persistent global price pressures, rising energy costs, and freight headwinds. Supply lines depend heavily on complex global shipping routes such as the Strait of Hormuz. Additionally, fluctuating Section 232 tariff costs threaten to squeeze importing margins.
The bottom line? For investors who believe aluminum's supply deficit will keep prices elevated, Alcoa offers significant structural upside. Deploying a buy-write strategy allows you to monetize today's high options pricing, turn a low-yielding stock into a cash-flow generator, while navigating a choppy commodity cycle.
-- Name Change Approved by Shareholders with 99.7% Support -- -- Name Change and Stock Ticker Change Effective as of May 19, 2026 -- CHICAGO, IL / ACCESS Newswire / May 19, 2026 / (NYSE:KWY) Kingsway Corporation ("Kingsway" or the "Company"), the only publicly-traded US company employing the Search Fund model to acquire and build great businesses, today announced shareholder approval of its name change to Kingsway Corporation. The Company's name change, along with the change of its stock ticker to KWY, are effective as of May 19, 2026.
Key Takeaways Alcoa's Q1 2026 cost of goods sold rose 3%, while SG&A expenses increased 16.9% year over year.AA expects a $15M unfavorable Q2 2026 impact from higher energy prices tied to diesel costs.Alcoa completed the San Ciprian smelter restart in April 2026, with restart costs in special items. Alcoa Corporation (AA - Free Report) has been facing persistent cost and expense pressures. In the first quarter of 2026, the company’s cost of goods sold increased 3% year over year. Selling, general, administrative and other expenses also rose approximately 16.9% year over year. Also, depreciation, depletion and amortization expenses climbed around 9% year over year.
Energy remains one of the largest cost components for the company, accounting for around 24% of alumina refining production costs and 24% of primary aluminum production costs in 2025. Given the energy-intensive nature of aluminum smelting, fluctuations in electricity, diesel and natural gas prices continue to pose a major risk. For second-quarter 2026, Alcoa expects approximately $15 million in unfavorable impacts from higher energy prices, mainly due to diesel costs associated with the Middle East conflict.
Raw material consumption also continues to pressure margins. For each metric ton of alumina produced, Alcoa consumes 2.2-4.0 metric tons of bauxite and 80-130 kilograms of caustic soda. Aluminum production also requires 1.91-1.94 metric tons of alumina and 13.26-16.82 megawatt-hours (MWh) of electricity per metric ton. Volatility in prices of caustic soda, calcined petroleum coke and other raw materials may increase production costs.
The company is also facing additional costs tied to restart activities and tariffs. In the first quarter of 2026, Alcoa continued restart operations at the San Ciprián smelter, with the restart safely completed in April 2026. Related restart expenses remained part of special items during the quarter.
Despite these cost pressures, Alcoa remains focused on improving operational efficiency, expanding renewable energy usage and maintaining disciplined capital allocation to support margins. However, ongoing volatility in energy and raw material costs may continue to weigh on the company’s near-term profitability.
AA’s Peer PerformanceAmong its major peers, Constellium SE (CSTM - Free Report) is facing cost pressure. Constellium’s cost of sales increased 18.9% in the first quarter of 2026. Constellium’s SG&A expenses rose 24.4% year over year in the same period.
The escalating costs and expenses are also a concern for Ryerson Holding Corporation (RYZ - Free Report) . Ryerson’s cost of sales rose 37.2% year over year in first-quarter 2026. Ryerson’s warehousing, delivery, selling, general and administrative expenses also increased 31.2% year over year in the same period.
AA’s Price Performance, Valuation and EstimatesShares of Alcoa have increased 3.5% in the past three months compared with the industry’s growth of 4.6%.
Image Source: Zacks Investment Research
From a valuation standpoint, AA is trading at a forward price-to-earnings ratio of 7.89X, below the industry’s average of 8.21X. Alcoa carries a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AA’s 2026 earnings has increased 35.2% over the past 60 days.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Iran war started on February 27, and the aluminum market has not been the same since. Alcoa CEO William Oplinger told investors on the company’s Q1 2026 call that London Metal Exchange prices had recently exceeded $3,600 per metric ton on tight inventories and Middle East supply disruptions. Reuters dubbed it a shock that has “rattled the global aluminum supply chain.” For the average American investor holding almost nothing in commodities directly, the question is whether to do anything about it. Kiplinger’s answer, laid out in its May 12 piece on inflation-hedging ETFs, is yes: a small, diversified commodity sleeve can blunt the inflation passthrough that wartime metal shocks produce.
The price move investors keep underestimating Aluminum is the cleanest read on the disruption, with Oplinger saying more than 2.5 million tons of annual smelting capacity and nearly 2 million tons of refining capacity have gone offline since the conflict began, much of it tied to the Strait of Hormuz, through which roughly 8.8 million tons of alumina and 6 million tons of bauxite transit each year. Century Aluminum CEO Jesse Gary put it in portfolio terms: “The Middle Eastern disruption has expanded our expected 2026 global deficit to 1.4 million tons.” Deficits of that scale do not unwind in a quarter.
This infographic details the aluminum producer stock surge and commodity ETF returns following the Iran War, highlighting the war-driven supply shock, the average portfolio’s commodity exposure gap, and Kiplinger’s recommendation for diversification. The passthrough is already in the broad commodity benchmarks. The Invesco DB Commodity Index Tracking Fund (NYSEARCA:DBC) is up 39.30% year to date and 47.40% over the past year, with shares at $31.19. That is the move a household with no commodity allocation has missed.
Where the gains have actually landed Alcoa (NYSE:AA | AA Price Prediction) reported Q1 2026 adjusted EBITDA of $595 million and adjusted EPS of $1.40, with the aluminum segment adding $174 million sequentially on higher metal prices. The stock has returned 111.83% over the past year.
Century Aluminum (NASDAQ:CENX) guided Q2 adjusted EBITDA to $315 million to $335 million, up from $231 million in Q1. The stock is up 255.85% over the past 12 months. Kaiser Aluminum (NASDAQ:KALU) reported $3.74 in Q1 2026 EPS against a $1.96 estimate, a 90.49% beat. Analysts had been resetting estimates upward all year and still missed.
The downstream side is more mixed. Lockheed Martin (NYSE:LMT) is up only 9.66% over the past year, with a trailing P/E of 25. Higher input costs and fixed-price defense contracts mean the aluminum surge hurts the buyer side of the chain even as it lifts producers.
How the average American is actually positioned The Charles Schwab Modern Wealth Survey found that 27% of American investors own ETFs, but those funds account for only 6% of the average investor’s portfolio. Within that 6%, dedicated commodity exposure is minimal. The Federal Reserve’s Survey of Consumer Finances shows that household financial assets are roughly 53% equities on average, with the balance in cash, bonds, and retirement accounts, which are themselves overwhelmingly equity-tilted.
That allocation worked during the disinflation of the 2010s. It does not work during a wartime supply shock. When a single-commodity ETF like DBC outpaces the S&P 500 by a wide margin over five months, a portfolio with zero commodity exposure takes the inflation hit on the cost side, with no offset on the asset side.
What Kiplinger’s framework actually says Kiplinger’s May 12 ETF guide recommends a diversified inflation hedge rather than a single-metal bet, noting that a broad commodity fund like DBC currently holds roughly 29.9% in energy, 29.3% in metals, and 27.8% in agriculture as of April 2026. The same geopolitical event lifting aluminum is also lifting WTI crude, which traded between $98 and $114 per barrel through April and early May after starting the year near $57 per barrel. A diversified vehicle captures the correlated move without single-commodity risk.
For a household evaluating its own allocation, the practical questions are narrow. First, is there any commodity exposure in the 401(k) or brokerage account, or is it 100% equities and bonds? Second, if exposure is added, is it through a broad-basket fund such as DBC, or through individual producers where earnings leverage is higher but volatility is much greater? Century Aluminum’s 1.916 beta functions as an amplifier of commodity moves rather than a stable inflation hedge.
For now, the timing of when the Strait reopens or when the deficit closes remains unknown. What the data shows is that the average American portfolio entered this shock with almost no commodity allocation and has missed the offset that a small one would have provided. That gap is the story, and it’s something that investors, even those of the retail variety, should move on before it’s too late.
