UPDATE: DA Davidson Reduces PT to $95 on Domtar Corporation on Secular Challenges

DA Davidson reiterated its Buy rating on Domtar Corporation

but lowered its price target from $100 to $95. DA Davidson said, "Domtar is clearly facing secular challenges in its core commodity business, but management has done a fine job transitioning volume into specialty grades of pulp and paper, and most importantly milking a highly productive cash cow. For instance, in the quarter just ended, Domtar generated $140 million ($4 per share) in free cash flow, $43 million of which was used to repurchase 578,000 shares in the period. In just over two years, Domtar has retired nearly 20% of its shares (8.1 million) and we expect the company to grow the dividend imminently and continue buying stock." Domtar Corporation closed at $79.81 on Thursday.