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Based in Memphis, International Paper Company (IP) is a leading global producer of renewable fiber-based products. With a market cap of $16 billion, the company specializes in manufacturing corrugated packaging and pulp used in personal care items such as diapers and tissue, supporting health and wellness.
Shares of the packaging company have outpaced the broader market over the past year. While IP has surged 25.6% over this time frame, the broader S&P 500 Index ($SPX) is up 18.5%. The stock has soared 27.1% in 2024 alone, higher than SPX’s 12.1% return on a YTD basis.
Zooming in further, IP has also outperformed the IShares Global Timber & Forestry ETF (WOOD). The exchange-traded fund has gained 5.7% over the past year, lower than IP’s double-digit return for the period.
IP stock rose marginally on July 24 following its Q2 earnings release. While the company beat Wall Street analysts’ EPS estimates, it failed to surpass revenue forecasts due to lower annual prices in both the Industrial Packaging and Global Cellulose Fibers segments.
However, the stock dipped 7.1% on June 27 after Brazilian pulp maker Suzano S.A. (SUZ) withdrew its $15 billion bid for International Paper following IP's refusal to negotiate. This decline was driven by disappointment over missed premium opportunities and regulatory and shareholder concerns.
For the current fiscal year, ending in December, analysts expect IP’s EPS to fall 24.1% year over year to $1.64. Moreover, the company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing on one other occasion.
International Paper has a consensus “Moderate Buy” rating overall. Out of nine analysts covering the stock, four rate it as a "Strong Buy," one suggests a "Moderate Buy," and four recommend a "Hold."
This configuration is slightly more bullish than two months before, with three analysts advising a "Strong Buy."
On July 25, RBC Capital analyst Matthew McKellar increased the price target for International Paper to $56 from $52 while maintaining an “Outperform” rating following a strong Q2 earnings report. The firm is optimistic about the company's ability to enhance performance through improved reliability, a refined customer strategy, and cost reductions.
The mean price target of $49.40 represents a 7.5% premium to International Paper’s current price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
