Sector Snap: Paper and forest products companies

Shares of paper and forest products companies up after ratings change, increased estimates

• On 1:48 pm EDT, Monday October 12, 2009

NEW YORK (AP) -- Shares of paper and forest products companies rose Monday after an analyst upgraded her rating on a timber company and raised her earnings estimates on several others.

JP Morgan analyst Claudia Shank Hueston boosted the shares of Seattle-based Plum Creek Timber Co. to "Neutral" from "Underweight" saying the stock has lagged its peers since June.

She raised her price targets on Montreal-based Domtar Corp., to $40 from $35.50, and Austin, Texas-based Temple-Inland Inc., to $18 from $16.50.

Hueston said Domtar has strong cash flow, less debt plus the discipline to keep its paper production in close alignment with actual demand; she said Temple-Inland continues to cut costs.

Besides the upgrade and heightened price targets, the analyst also raised her per-share earnings estimates for several companies.

Hueston boosted her estimate for Nashville, Tenn.-based Louisiana-Pacific Corp. to a loss of 97 cents from a loss of $1.06 for fiscal 2009 as a result of debt reductions and a secondary stock offering.

Her per-share earnings projection for Domtar goes to a loss of 64 cents from a loss of $2.46 on strong global pulp shipments, and her forecast for Temple-Inland's profit this year was raised to 13 cents per share from 8 cents per share on lower expenses.

In afternoon trading, Plum Creek Timber rose 52 cents to $32.36, Louisiana-Pacific gained 18 cents, or 2.6 percent, to $7.09 and Temple-Inland lost 1 cent to $16.08.

Buzz up!