Analyst Philip Ng of Jefferies maintained a Buy rating on International Paper Co (IP – Research Report), boosting the price target to $71.00.
Philip Ng has given his Buy rating due to a combination of factors that suggest a strong future performance for International Paper Co. The company is implementing its 80/20 playbook, which involves optimizing its operations by segmenting box plants and reducing complexity. This strategy has already shown a significant productivity improvement in pilot plants, and its broader rollout is expected to enhance operational efficiency and maintain pricing power.
Ng also highlights the successful integration of DS Smith, which provides International Paper with increased scale and vertical integration in Europe. This merger is expected to contribute significantly to the company’s earnings growth, with synergies projected to reach $514 million. Additionally, the divestiture of pulp operations is anticipated to further boost returns, positioning International Paper to achieve a substantial increase in EBITDA by 2027. These strategic moves are expected to result in a re-rating of the company’s valuation multiple, potentially doubling the stock price within the next two years.
Ng covers the Consumer Cyclical sector, focusing on stocks such as International Paper Co, Ball, and Mohawk. According to TipRanks, Ng has an average return of 8.2% and a 51.52% success rate on recommended stocks.
In another report released on March 5, Citi also initiated coverage with a Buy rating on the stock with a $60.00 price target.
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