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International Paper Company (IP), headquartered in Memphis, Tennessee, is a prominent global producer of renewable fiber-based products, boasting a market cap of $18.7 billion. The company specializes in corrugated packaging solutions and pulp for personal care products, serving a diverse array of industries. It is expected to release its fiscal Q4 earnings results on Thursday, Jan. 30, before the market opens.
Ahead of this event, analysts predict IP’s profit to fall 85.4% year over year to $0.06 per share. The company has surpassed Wall Street's bottom-line estimates in three of the past four quarters while missing on one other occasion. Nevertheless, in the recent quarter, the company surpassed the consensus estimate by 83.3%.
For fiscal 2024, analysts forecast IP to report EPS of $1.18, down 45.4% from $2.16 in fiscal 2023. However, they predict a robust rebound in fiscal 2025, with EPS expected to soar by 155.9% year-over-year to reach $3.02.
Over the past 52 weeks, IP has climbed 47.1%, outperforming the broader S&P 500 Index's ($SPX) 22.1% return and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 27.4% returns over the same time frame.
International Paper has outpaced the broader market over the past year due to strategic moves, including the appointment of CEO Andrew Silvernail, the $9.4 billion acquisition of DS Smith, and operational efficiency initiatives aimed at boosting profitability. These factors have positioned the company for continued growth in the packaging industry.
On October 31, shares of IP popped 13.3%, driven by its robust third-quarter earnings report. The company posted adjusted earnings of $0.44 per share, exceeding the consensus estimate. Net sales totaled $4.7 billion, slightly surpassing expectations, as higher prices offset lower volumes.
Additionally, investor optimism was further fueled by progress on the acquisition of DS Smith, which is expected to deliver at least $514 million in pre-tax cash synergies and strengthen IP's European packaging business.
Analysts' consensus view on International Paper stock is cautiously bullish, with a "Moderate Buy" rating overall. Among nine analysts covering the stock, five suggest a "Strong Buy," one gives a "Moderate Buy," two recommend a "Hold," and the remaining analyst gives it a “Strong Sell.”
The average analyst price target for IP is $56.60, suggesting a potential upside of 2.1% from current price levels.
