If you’ve been watching the ticker for Clearwater Paper Corporation (NYSE: CLW) lately, you’ve probably noticed it looks like a completely different beast than it did just two years ago. Most retail investors still talk about Clearwater as that "toilet paper and napkin company."
Honestly? That’s the first mistake.
As of early 2026, Clearwater Paper has basically shed its old skin. The massive $1.06 billion sale of its tissue business to Sofidel, which wrapped up late in 2024, wasn't just a minor tweak to the balance sheet. It was a total identity shift. Today, when you buy Clearwater Paper Corporation stock, you aren't betting on the private-label paper towels in a grocery aisle; you’re betting on a pure-play North American paperboard powerhouse.
The Augusta Pivot and the Paperboard Gamble
The stock is currently hovering around the $20.30 to $20.60 range, which is a far cry from the $33 highs we saw back in mid-2025. What happened?
Well, the company went all-in on paperboard. By acquiring the Augusta, Georgia facility, they boosted their capacity by nearly 75%. That’s a massive amount of supply to bring online right as the broader market decided to cool off. CEO Arsen Kitch and his team are basically navigating a classic "supply-demand mismatch."
The industry is currently staring down an oversupply of Solid Bleached Sulfate (SBS)—the high-end stuff used for pharma packaging and those fancy folding cartons. Industry data suggests about 500,000 tons of excess capacity is floating around the market. This has kept utilization rates in the low 80% range, which is never where you want to be if you’re trying to maintain pricing power.
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Why the Bears are Growling
It hasn't been all sunshine. The Q3 2025 earnings report showed a net loss of $54 million.
A big chunk of that—about $48 million—was a non-cash goodwill impairment. Basically, the accountants looked at the books and admitted some assets weren't worth what they thought they were. But even without that, the numbers were tight. Revenue sat at $399 million, and while they beat analyst estimates slightly, the market didn't care.
Investors are worried about:
- Price Compression: Average net selling prices for paperboard dropped double digits year-over-year.
- Maintenance Costs: Those big "outages" at the Lewiston and Augusta mills aren't cheap. We're talking $24 million and $16 million respectively just to keep the machines humming.
- Concentration Risk: When you focus on one thing, you’re at the mercy of that one market.
The Case for a 2026 Rebound
Is it all doom and gloom? Kinda, but maybe not for long.
There’s a reason why some analysts, including folks at TD Cowen and RBC, still have price targets sitting up near $30. That’s a massive upside from where we are today. The logic is pretty straightforward: Clearwater is getting leaner.
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They’ve already cut 10% of their workforce. That sounds harsh, but it’s tracking toward $50 million in annual cost savings. That’s more than their original $30 million target. If they can keep their SG&A (selling, general, and administrative) expenses at that 6% of sales sweet spot, any recovery in paperboard prices is going to drop straight to the bottom line.
What the Smart Money is Watching
- Capacity Rationalization: Word on the street is that the industry might see 350,000 tons of capacity exit the market in the first half of 2026. If competitors shut down older, less efficient mills, Clearwater’s shiny Augusta plant looks a lot better.
- The CUK Swing Project: There’s a plan to invest $50 million to allow their mills to "swing" production to Coated Unbleached Kraft (CUK). They’ve put this on hold for now to protect the balance sheet, but if they pull the trigger, it gives them the agility to chase whatever grade of paper is actually making money that month.
- De-leveraging: They used the tissue sale cash to pay down a mountain of debt. Net leverage is now around 2.7x. They aren't drowning in interest payments anymore.
Valuation: Is It Actually Cheap?
Look at the Price-to-Book ratio. It’s sitting around 0.42.
In plain English, that means the stock is trading for less than half the value of the assets the company owns. That is usually a "screaming buy" signal or a "value trap" warning.
The bulls argue that Clearwater is being punished for industry-wide headwinds that they can’t control. If you believe the packaging market for food and consumer goods isn't going away, buying an efficient producer at a 50% discount to book value feels like a classic Graham-and-Dodd value play.
The bears, however, point to the negative Return on Equity (ROE) of -32%. They’ll tell you it doesn't matter how many mills you own if you can’t turn a profit with them.
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Realities of the 2026 Outlook
Management is targeting 2026 revenue between $1.45 billion and $1.55 billion. They aren't expecting to be a net cash taxpayer this year thanks to some new tax legislation, which helps the cash flow situation significantly.
Technically, the stock is in a bit of a "no man's land." It recently triggered a "Death Cross" (where the short-term moving average drops below the long-term one), but it’s also found some support near the $17.50 level.
If you’re looking at Clearwater Paper Corporation stock, you have to ask yourself: Do I believe in the "Paperboard Pivot"?
The company is no longer a diversified paper products company. It’s a specialized packaging supplier. That makes it more volatile, but also more sensitive to a manufacturing rebound.
Actionable Next Steps for Investors
- Check the February 12th Earnings: The Q4 2025 results are expected then. Watch the "Adjusted EBITDA" closely. If they beat the $18 million they did last quarter, the narrative might start to shift.
- Monitor SBS Pricing: Keep an eye on RISI (Fastmarkets) reports. If you see $30-$40 per ton price increases stick in the first half of 2026, the stock will likely move before the next earnings report even hits.
- Size Appropriately: This is a small-cap stock (market cap around $326 million). It can swing 5-7% in a single day on very little news. Don’t make it the cornerstone of your retirement unless you have a very high tolerance for paper cuts.
Clearwater Paper isn't the "safe" dividend-paying utility-style stock some people think it is. It’s a turnaround story in a cyclical industry. Whether that's a bargain or a burden depends entirely on your timeline for a packaging recovery.
Research the specific mill utilization rates for the Augusta facility to see if they are outperforming the industry average of 80%.