NEW YORK (TheStreet) -- Shares of Rayonier Advanced Materials (RYAM) were increasing in mid-morning trading on Tuesday as RBC Capital Markets upgraded the stock to "sector perform" from "underperform."
The firm has a $10 price target on shares of the Jacksonville, FL-based producer of cellulose specialties and commodity products.
Weak acetate tow supply-demand fundamentals and cigarette consumption trends are headwinds in its core business, according to RBC Capital.
But "we believe the current valuation is supported by: progress/visibility on cost-cutting initiatives; improving near-term viscose outlook; reduced leverage post convertible pref financing; and upside from potential lignin-based joint venture with Borregaard," the firm wrote in an analyst note.
Additionally, the company has done a "commendable job" with cost-reduction initiatives over the past several years, RBC Capital noted.
Separately, TheStreet Ratings Team has a "sell" rating with a score of D on the stock.
The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and poor profit margins.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: RYAM