Morningstar Rating

Stock Research and Analysis

by Liang Feng

Bulls Say

R.R. Donnelley has consistently been profitable despite intense price competition within the industry, illustrating its resiliency in an otherwise competitive industry.
R.R. Donnelley is both operationally and financially leveraged to fairly cyclical markets, so the company would benefit significantly from a sustained economic recovery.
The acquisition of Consolidated Graphics has the potential to yield significant cost synergies, that could make the transaction highly accretive for R.R. Donnelley. Read more 

Bears Say

We expect excess capacity will dwindle over time, but this will most likely be a slow process because of high exit barriers.
R.R. Donnelley's increased leverage puts the firm at risk because revenue is cyclical, and the firm may have difficulty repaying its obligations if the economy declines.
As more firms make the transition from traditional printing and advertising services to digital mediums, demand for R.R. Donnelley's services could decline, continuing to pressure pricing across the sector. Read more 

Management

We have assigned R.R. Donnelley a Poor stewardship rating. From our perspective, the executive team has efficiently managed the company's day-to-day operations. However, management has taken an aggressive approach of increasing leverage to finance share   Read more 

Profile

R.R. Donnelley is a global provider of printing and media solutions for large corporate customers. The firm has diversified printing operations in magazines, newspaper inserts,  Read more 

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