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With a market cap of $18.9 billion, International Paper Company (IP) is a global leader in renewable fiber-based products, specializing in corrugated packaging and pulp solutions. With operations spanning North America, Europe, Latin America, Russia, Asia, and North Africa, the company supports worldwide commerce and promotes health and wellness through its diverse offerings.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and International Paper fits this criterion perfectly. Its two primary segments - Industrial Packaging and Global Cellulose Fibers deliver liner boards, recycled materials, and specialty pulps for personal care, construction, and textile applications. Based in Memphis, Tennessee, International Paper serves a broad customer base through direct sales, agents, and distributors.
However, the global paper and packaging company has experienced a decline, slipping 9.7% from its 52-week high of $60.36 reached on Nov. 25. Over the past three months, its shares have increased 12.5%, outperforming the broader S&P 500 Index's ($SPX) 4.5% gain during the same period.
In the long term, IP has risen 18.3% over the past six months, outpacing SPX's 9.3% gain. Moreover, IP’s shares have surged 48.7% over the past 52 weeks, compared to SPX's 25.7% return in the same period.
IP has been trading above both its 50-day and 200-day moving averages since last year despite some fluctuations.
Shares of International Paper surged 13.3% on Oct. 31, driven by its strong Q3 2024 earnings report, which posted adjusted earnings of $0.44 per share, beating the consensus estimate. The company also reported net sales of $4.7 billion, slightly surpassing the estimate, as higher prices offset lower volumes. Additionally, progress on acquiring DS Smith, expected to provide at least $514 million in pre-tax cash synergies and enhance IP’s European packaging business, fueled optimism. The company’s guidance for improved Industrial Packaging earnings in Q4 and its focus on cost optimization and strategic investments further boosted investor confidence.
In addition, the stock's rival, Packaging Corporation of America (PKG) has underperformed International Paper, with its shares rising 38.7% over the past 52 weeks. However, IP has lagged behind PKG’s 23.9% over the past six months.
Despite IP’s relatively strong price action over the past year, analysts are cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the nine analysts in coverage, and it is currently trading below the mean price target of $56.41.
