Lars Kjellberg, an analyst from Stifel Nicolaus, maintained the Hold rating on International Paper Co (IP – Research Report). The associated price target remains the same with $57.80.
Lars Kjellberg has given his Hold rating due to a combination of factors impacting International Paper Co. The company is undergoing a significant strategic shift under new leadership, aiming to double its mid-cycle EBITDA. However, the transition has been challenging, with the company experiencing a decline in earnings and market share, as well as a widening margin gap compared to its peers. Despite efforts such as mill closures and headcount reductions, tangible improvements have yet to materialize.
Additionally, the company’s capital spending has lagged behind industry leaders, which has been identified as a reason for its underperformance. The acquisition of DS Smith, while potentially beneficial in terms of innovation and European market exposure, also presents challenges due to its weaker margins. Furthermore, the disposal of the Global Cellulose Fibre segment could improve earnings stability, but the process is still ongoing. These factors contribute to the Hold rating, as the company’s future performance remains uncertain amidst these strategic changes.
Kjellberg covers the Consumer Cyclical sector, focusing on stocks such as International Paper Co, Avery Dennison, and Graphic Packaging. According to TipRanks, Kjellberg has an average return of 8.0% and a 55.00% success rate on recommended stocks.
In another report released today, Bank of America Securities also maintained a Hold rating on the stock with a $61.00 price target.
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