UPDATE: BMO Capital Markets Reiterates Outperform Rating, Raises PT on Resolute Forest Products

In a report published Monday, BMO Capital Markets reiterated its Outperform rating on Resolute Forest Products

, and slightly raised its price target from $18.00 to $19.00. BMO Capital noted, “Resolute (RFP) is restarting the Dolbeau SC-Paper Mill at a cost of $20 million. The keys to the restart were a competitive union labour contract and an agreement with Hydro-Quebec for the surplus power from the 26MW cogeneration system. Alliance Forest Products had built the co-gen system for $66 million and sold it to Boralex for $76 million in March 1999. RFP acquired the co-gen system for $5 million. We estimate the restart will add $20 million to cash flow or $0.14 to EPS. The mill will produce 130,000 tpy SC-B paper. Simple payback is 15 months. Resolute will balance its SC-B production to meet market demand.” Resolute Forest Products closed on Friday at $12.06.