Glatfelter Needs To Rejuvenate Volume Growth

It's been a while since I've written on Glatfelter (NYSE:GLT), but this specialty paper and engineered fiber product company has remained frustratingly underpowered on growth, with year-over-year revenue contraction reported in every quarter since the fourth quarter of 2014. Meanwhile, Finland's Ahlstrom has been on much better footing with respect to volume growth, revenue growth, and margin improvement.

Glatfelter isn't unfixable, but it is going to take time and I don't think the company has any obvious quick fixes. What's more, there's a surprising amount of volatility here - the shares' 19% drop on the day of its last earnings was arguably excessive, but the subsequent post-election rally likewise seems more than a little optimistic. I believe the underlying markets for many of Glatfelter's specialty products can support mid single-digit long-term revenue growth, but the specialty paper business is likely in long-term decline and there's still work to be done to improve the specialty businesses. With an okay valuation today, but not especially bright prospects for near-term volume growth, these shares look uninspiring after the rally.

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Glatfelter Needs To Rejuvenate Volume Growth