Earnings Preview: What to Expect From International Paper's Report

International Paper Company (IP) is a leading global producer of renewable fiber-based products, with a market cap of $16.6 billion. The Memphis, Tennessee-based company specializes in corrugated packaging solutions and pulp for personal care products, serving a wide range of industries. It is expected to release its fiscal Q3 earnings results on Thursday, Oct. 24.

Ahead of this event, analysts project the global paper and packaging company to report a profit of $0.24 per share, a decline of 62.5% from $0.64 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in three of the past four quarters while missing on one other occasion. In Q2, IP beat the consensus estimate by 37.5%.

For fiscal 2024, analysts forecast IP to report EPS of $1.55, down 28.2% from $2.16 in fiscal 2023. However, looking ahead to fiscal 2025, analysts expect a significant recovery, with EPS projected to grow by around 71% year-over-year, reaching $2.65.

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In 2024, International Paper gained 31.2%, outperforming the broader S&P 500 Index's ($SPX) 20.3% return and the Materials Select Sector SPDR Fund’s (XLB) 10.2% returns on a YTD basis. 

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Despite missing sales estimates, shares of International Paper recovered marginally on Jul. 24 due to the company's stronger-than-expected Q2 adjusted EPS of $0.55. The company also posted improved gross profit and returned its Global Cellulose Fibers segment to profitability, which helped boost investor sentiment. Additionally, progress on the DS Smith acquisition, expected to enhance IP's corrugated packaging business in Europe, contributed to the stock's slight recovery.

Analysts' consensus view on International Paper stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among nine analysts covering the stock, five suggest a "Strong Buy," one gives a "Moderate Buy," and three recommend a "Hold." 

This configuration is slightly more bullish than three months ago, with four analysts suggesting a "Strong Buy." The average analyst price target for IP is $50.64, suggesting a potential upside of just 6.5% from current levels. 

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On the date of publication, Sohini Mondal 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.