International Paper: A Mixed Bag of Performance and Potential
International Paper Company (IP), with a market cap of $18.9 billion, stands as a key player in renewable fiber-based products, focusing on corrugated packaging and pulp solutions. Its operations stretch across continents including North America, Europe, Latin America, Russia, Asia, and North Africa, contributing to global commerce and promoting health and wellness through various products.
Large-Cap Leader with Diverse Offerings
Being valued at $10 billion or more makes International Paper a “large-cap” stock. The company is divided into two main segments: Industrial Packaging and Global Cellulose Fibers. It provides liner boards, recycled materials, and specialty pulps for applications in personal care, construction, and textiles. Headquartered in Memphis, Tennessee, IP caters to a wide range of customers through direct sales, agents, and distributors.
Recent Stock Performance Shows Fluctuation
Recently, International Paper’s stock has faced challenges, declining by 9.7% from its 52-week high of $60.36 achieved on November 25. Nevertheless, shares have gained 12.5% in the last three months, outperforming the S&P 500 Index’s ($SPX) 4.5% increase during this period.
Looking at a longer horizon, IP’s stock has risen 18.3% over the past six months, surpassing the SPX’s 9.3% gain. Over the last year, the company’s shares have surged by 48.7%, compared to the SPX’s 25.7% return.
Positive Earnings Report Sparks Investor Optimism
International Paper saw its shares jump by 13.3% on October 31 in response to a strong Q3 2024 earnings report revealing adjusted earnings of $0.44 per share, which beat analysts’ expectations. The company notched net sales of $4.7 billion, slightly exceeding estimates, with higher prices compensating for reduced volumes. Furthermore, plans to acquire DS Smith are expected to yield at least $514 million in pre-tax cash synergies, bolstering IP’s European packaging segment. The company’s guidance for improved Industrial Packaging earnings in Q4 and efforts in cost optimization and strategic investments have also increased investor confidence.
Comparative Performance Against Other Stocks
In comparison, Packaging Corporation of America (PKG) has underperformed relative to International Paper, with its shares rising only 38.7% over the past year. Yet, IP has not kept pace with PKG’s 23.9% growth over the last six months.
Analyst Outlook Remains Cautiously Optimistic
Despite a relatively solid performance over the past year, analysts remain cautiously optimistic about International Paper’s future. It holds a consensus rating of “Moderate Buy” from nine analysts, and it is currently trading below the average price target of $56.41.
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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
