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Founded in 1898, the Memphis-headquartered International Paper Company (IP) is a global producer of renewable fiber-based products. With a market cap of $15.8 billion, it manufactures corrugated packaging for goods and pulp for personal care products like diapers and tissue, promoting health and wellness.
Shares of the pulp and paper company have outshined the broader market over the past year. While IP has surged 44.5% over this time frame, the broader S&P 500 Index ($SPX) is up 28.9%. The stock has soared 25.8% in 2024 alone, higher than SPX’s 11.2% 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 18.4% over the past year, lower than IP’s return for the period.
Shares of the paper company have been on an upward trajectory this month amid talks of potential partnerships and acquisitions. While nothing has been confirmed yet, Brazilian pulp maker Suzano Papel (SUZ) is reported to be interested in acquiring assets from International Paper. On the other hand, IP is set to acquire British packaging firm DS Smith Plc (SMDS.LN) for $7.2 billion.
For the current fiscal year, ending in December, analysts expect IP’s EPS to fall 12% year over year to $1.90. Moreover, the company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing in one other occasion.
International Paper has a consensus “Moderate Buy” rating overall. Out of eight analysts covering the stock, three rate it as a "Strong Buy," one suggests a "Moderate Buy," and four recommend a "Hold."
This configuration is slightly more bullish than a month before, with two analysts advising a "Strong Buy."
On May 23, Jefferies analyst Philip Ng upgraded International Paper to “Buy” from “Hold” and raised the price target from $38 to $57, which is also the Street-high price target. Philip believes the new CEO, Andrew Silvernail, will unlock shareholder value by focusing on value over volume in sales, increasing scale in Europe, and refining the company's portfolio.
The stock is currently trading slightly at a premium to its mean price target of $44.
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.
