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AbitibiBowater Inc. 09 July 2008

Company News Alert

Significant single-day price appreciation

NYSE BUY Direct

2008. Thisaccess to thepositive
fullinvestor
reportreaction
freetoofa disclosure
chargebyatSteelhead Partners LLC
The AbitibiBowater Inc. (AbitibiBowater) NYSE common stock appreciated significantly on 08 July
decline reflects
Common http://www.iirgroup.com/researchoracle/viewreport/show/20249
(Steelhead) that it owns a 5.3% stake in AbitbiBowater, as well as a sell-off in crude oil. Despite the
one-day rise in the stock price, we believe the company remains fundamentally undervalued.
Stock Therefore, we maintain our BUY rating for the NYSE common stock.
Ticker: ABH
Target price: US$19.21
Current price: US$9.13
Price change
(11.8%) We will reassess our common stock rating for AbitibiBowater in our next full update report.
since last report:

Canadian BUY We anticipate a positive currency impact on the Canadian stock over our investment horizon.
Therefore, we maintain our BUY rating.
Stock
Ticker: ABH.TO
Target price: C$20.36
Current price: C$9.39
Price change
(6.6%) We will reassess our Canadian stock rating for AbitibiBowater in our next full update report.
since last report:

Supervisor: Meera Patil

Analyst: Sujit Agrawal
Editor: James Smithies
Global Research Director:
Satish Betadpur, CFA
Next news due:
2Q 08 results, August 2008
Investment horizon - short term actionable trading strategies
This report addresses the needs of strategic investors with a long term investment horizon of 6-24 months. If this
report is provided to you by your broker under the Global Settlement, you may now also access (free of charge) the
short term trading outlook that we publish from time to time for this issuer, looking at the coming 5-30 days for
readers with a shorter trading horizon. These are available online only at www.researchoracle.com.
In our 4Q 07 and FY 2007 update report, dated 03 March 2008, we reiterated the AbitibiBowater
NYSE common stock a BUY on fundamental grounds, with a 6-24 month target price of US$19.21 and
a potential upside of 86%. Since then, the NYSE common stock has depreciated by 11.8%.

However, the NYSE common stock rebounded by 16.6% on 08 July 2008, driven by positive investor
reaction to a disclosure by Steelhead that it owns a 5.3% stake in AbitibiBowater, making it the
company’s fourth-largest shareholder. Further momentum was provided by a 3.8% single-day decline
in crude oil prices to US$136.04 per barrel, which supported the stock due to the significant impact of
energy costs on the company’s margins.

Despite the significant appreciation in the NYSE common stock price on 08 July 2008, we believe the
company remains fundamentally undervalued. Therefore, we maintain our BUY rating.

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