International Paper Co (IP) AI Stock Analysis

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International Paper Co

(NYSE:IP)

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Neutral 49 (OpenAI - 5.2)

Rating:49Neutral

Price Target:

$47.00

▼(-1.05% Downside)

The score is held back primarily by the 2025 collapse in profitability and negative free cash flow, alongside a technically weak price trend. These are partially offset by constructive 2026 guidance and cost-out progress from the latest earnings call, plus a supportive dividend yield and a portfolio-refocusing divestiture.

Positive Factors

North America EBITDA Strength

Sustained double-digit EBITDA growth and meaningful margin expansion in North America indicate durable operational leverage and execution on commercial initiatives. Higher margins plus leading service metrics (on-time delivery) support repeatable customer wins and long-term volume and margin resilience in IP's largest market.

Material Cost-Out Progress

Substantial, realized cost savings provide structural margin improvement and a clearer path to restored free cash flow. Run-rate benefits reduce fixed cost exposure, improve competitiveness on price, and create capacity to fund targeted investments and the planned regional separation without solely relying on revenue gains.

Portfolio Refocus via Divestiture

Divesting the GCF business sharpens strategic focus on core packaging, simplifying operations and capital allocation. Concentrating resources on high-scale regional packaging businesses supports targeted investments, faster decision-making, and potentially higher long-term returns despite the near-term loss of revenue from GCF.

Negative Factors

2025 Profitability Collapse

A sharp swing to a net loss and negative free cash flow materially weakens financial flexibility and prolongs the recovery timeline for returns. Restoring positive operating profit and FCF is essential to support dividends, deleveraging, and execution of the separation without external financing or asset sales.

Large One-Time Charges

Nearly $1B of accelerated depreciation and elevated D&A compress reported earnings and ROE for multiple periods. These non-cash but structural accounting impacts reduce reported profitability benchmarks, complicate comparability and could mask true operating trends while limiting headline earnings recovery.

Separation & Execution Risk

The planned 12–15 month regional separation creates sustained execution risk, regulatory/tax uncertainty and management distraction. Complex carve-outs, transitional services and potential delays increase costs and could slow realization of projected synergies and capital-allocation benefits from the strategic split.

International Paper Co (IP) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$25.08B

Dividend Yield4.69%

Average Volume (3M)6.97M

Price to Earnings (P/E)―

Beta (1Y)0.93

Revenue Growth33.71%

EPS Growth-517.99%

CountryUS

Employees65,000

SectorConsumer Cyclical

Sector Strength84

IndustryPackaging & Containers

Share Statistics

EPS (TTM)-0.08

Shares Outstanding528,038,300

10 Day Avg. Volume10,918,574

30 Day Avg. Volume6,965,899

Financial Highlights & Ratios

PEG Ratio0.01

Price to Book (P/B)1.40

Price to Sales (P/S)0.84

P/FCF Ratio-130.80

Enterprise Value/Market Cap1.41

Enterprise Value/Revenue1.42

Enterprise Value/Gross Profit4.82

Enterprise Value/Ebitda-272.43

Forecast

1Y Price Target

$46.78

Price Target Upside-1.52% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering11

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

International Paper Co Business Overview & Revenue Model

Company DescriptionInternational Paper Company operates as a packaging company primarily in United States, the Middle East, Europe, Africa, Pacific Rim, Asia, and rest of the Americas. It operates through two segments: Industrial Packaging and Global Cellulose Fibers. The Industrial Packaging segment manufactures containerboards, including linerboard, medium, whitetop, recycled linerboard, recycled medium, and saturating kraft. The Global Cellulose Fibers segment provides fluff, market, and specialty pulps that are used in absorbent hygiene products, such as baby diapers, feminine care, adult incontinence, and other non-woven products; tissue and paper products; and non-absorbent end applications, including textiles, filtration, construction material, paints and coatings, reinforced plastics, and other applications. It sells its products directly to end users and converters, as well as through agents, resellers, and paper distributors. The company was founded in 1898 and is headquartered in Memphis, Tennessee.

How the Company Makes MoneyInternational Paper generates revenue primarily through the sale of its products across its three segments. The Industrial Packaging segment, which includes containerboard and corrugated packaging, accounts for a significant portion of the company's revenue, driven by demand from various industries such as e-commerce, food and beverage, and consumer goods. The Global Cellulose Fibers segment contributes through the production of absorbent materials used in personal care products, while the Printing Papers segment generates income through the sale of paper products for commercial printing and publishing. Additionally, International Paper benefits from strategic partnerships and long-term contracts with major customers that provide stable revenue streams. The company's commitment to sustainability and innovation also enhances its market position, enabling it to capitalize on growing demand for eco-friendly packaging solutions.

International Paper Co Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Shows how much revenue each business segment generates, highlighting which areas are driving growth and which may need strategic adjustments.

Chart InsightsInternational Paper's recent revenue surge in Packaging Solutions for North America and EMEA marks a strategic pivot, as the company exits nonstrategic markets and focuses on core areas. This shift aligns with their transformation strategy, evidenced by a 40% increase in North American adjusted EBITDA. However, macroeconomic challenges in EMEA and anticipated declines in U.S. box shipments pose risks. Despite these headwinds, strategic cost initiatives and market share gains are expected to drive long-term EBITDA growth, with a target of $5 billion by 2027.

Data provided by:

The Fly

International Paper Co Earnings Call Summary

Earnings Call Date:Jan 29, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:Apr 30, 2026

Earnings Call Sentiment Positive

The call outlined a decisive strategic shift — separating into two regional public companies — supported by meaningful cost-out progress, strong North America EBITDA growth (≈37% YoY) and margin expansion (~230 bps). Pro forma scale and clear 2026 guidance (adjusted EBITDA $3.5–$3.7B) provide a constructive outlook. Near-term challenges include transformation-related one-time costs, negative free cash flow in 2025, workforce reductions in EMEA, pricing uncertainty (price actions excluded from guidance), and timing/transition risks associated with the spin. On balance, the positives — substantial executed cost actions, commercial momentum, improved service metrics, and clear multi-year targets — outweigh the short-term headwinds and execution risks.

Q4-2025 Updates

Positive Updates

Transformation and Strategic Separation

Announced plan to separate into two publicly traded regional packaging leaders (Packaging Solutions North America and Packaging Solutions EMEA) to increase regional focus, tailored capital allocation, and accelerate value creation.

Pro Forma Scale and Profitability

Packaging Solutions North America pro forma FY2025 net sales > $15B and ~ $2.3B adjusted EBITDA; Packaging Solutions EMEA pro forma FY2025 net sales ~ $8.5B and ~ $800M adjusted EBITDA.

Strong North America EBITDA Growth

North America achieved approximately 37% year-over-year adjusted EBITDA growth in 2025 and reported expanded adjusted EBITDA margin of ~230 basis points for the enterprise.

Material Cost-Out Progress

Executed $710M of cost-out actions through 2025 on a full run-rate basis (includes synergy benefits to be realized in 2026-27); North America delivered ~ $510M of run-rate cost benefits in 2025 and expects incremental cost benefits across footprint, productivity and sourcing in 2026.

Customer & Service Improvements

Achieved highest customer satisfaction among direct competitors in North America and leading customer experience scores in EMEA; North America increased on-time delivery to the upper-90s, enabling above-market volume growth and strategic customer wins (outpacing market by ~3–4 percentage points in Q4).

Operational Deployment

Rolled out the lighthouse model to 85% of the box plant system; mill reliability investments underway with plans for continued capacity and capability upgrades (e.g., Riverdale conversion).

2026 Financial Targets and Outlook

Enterprise guidance for 2026: net sales $24.1–$24.9B; adjusted EBITDA $3.5–$3.7B; free cash flow $300–$500M. Q1 2026 adjusted EBITDA guidance (including corporate): $740–$760M. Long-term ambition: $5B EBITDA by 2027.

EMEA Investment Plan

Plan to invest approximately $400M in EMEA during 2026 to fund transformation and 8020 implementation; EMEA expects ~$200M commercial benefit and ~$200M cost-out benefits in 2026 (offset in part by ~$100M inflation impact).

Negative Updates

Negative Free Cash Flow in 2025

Investment in the transformation and acquisition-related effects resulted in negative free cash flow of $159M for the enterprise in 2025.

Large Non-Cash and One-Time Charges

Adjusted EBIT and EPS were impacted by approximately $958M of accelerated depreciation related to footprint optimization and higher D&A from the DS Smith acquisition.

Near-Term Headwinds and One-Time Costs

Expected 2026 headwinds include ~ $200M of nonrecurring transformation costs (primarily Riverdale mill conversion) and roughly $200M of inflationary pressure in North America; management also called out ~ $165M of first-half timing/nonrecurring impacts.

Q4 North America Volume & Costs Pressures

Q4 North America had an $87M unfavorable volume variance (including ~ $60M from exiting nonstrategic export business and three fewer shipping days); maintenance and outages were $41M unfavorable and increased reliability spending contributed to near-term cost pressure.

Workforce Reductions and Site Closures in EMEA

EMEA implemented 20 site closures affecting ~1,400 roles with an additional seven sites (≈700 roles) in consultation — significant headcount reductions and associated social impact, though expected to deliver > $160M run-rate savings.

Market Headwinds and Pricing Uncertainty

EMEA market remains soft with continued pressure on board pricing; pricing actions are not included in 2026 guidance and price realization remains uncertain (management noted ~$90M adjusted EBITDA per $10/ton price move as sensitivity).

Spin Complexity and Timing Uncertainty

Separation expected to take 12–15 months, subject to regulatory and customary conditions; tax-free status for U.S. shareholders depends on final terms and retained ownership percentage, creating short-term uncertainty.

Weather and Operational Risks

Recent winter storm in the U.S. Southeast estimated to impact Q1 2026 EBITDA by approximately $20–$25M; singular mill reliability issues can cause material period volatility.

Company Guidance

The company guided enterprise 2026 net sales of $24.1–$24.9 billion, adjusted EBITDA of $3.5–$3.7 billion and free cash flow of $300–$500 million, with first‑quarter consolidated adjusted EBITDA of $740–$760 million; Packaging Solutions North America (pro forma FY'25: >$15B sales, ~$2.3B adj. EBITDA) is targeting $2.5–$2.6B adj. EBITDA in 2026 driven by ~ $100M of commercial benefits and ~$500M of cost benefits (offset by ~$200M of nonrecurring transformation costs and roughly $200M of inflation), with Q1 NA outlook of ~ $534M adj. EBITDA (price/mix +$51M, volume -$68M) and an estimated winter‑storm Q1 hit of $20–$25M; Packaging Solutions EMEA (pro forma FY'25: ~$8.5B sales, ~$800M adj. EBITDA) expects ~$200M of commercial and ~$200M of cost‑out benefits in 2026 (offset by ~$100M of inflation), Q4 EMEA EBITDA up $19M sequential, and Q1 roughly flat with price/volume tailwinds ~+$33M but ops/costs +$42M; other metrics: $710M total cost‑out actions through 2025, $510M run‑rate benefits in NA in 2025, >$160M run‑rate savings from EMEA site actions, ~165,000,000 of first‑half nonrecurring timing impacts that unwind in H2, and every $10/ton of price = ~ $90M annualized EBITDA.

International Paper Co Financial Statement Overview

Summary

2025 fundamentals showed a clear break: the company swung to a large net loss (net margin -14.1%) with negative operating profit and EBITDA, while free cash flow turned slightly negative (-$0.16B) despite operating cash flow holding up (~$1.7B). Leverage looks manageable (debt-to-equity ~0.70), but negative ROE (-23.7%) and weaker cash conversion reduce financial flexibility until profitability and FCF recover.

Income Statement

Negative

Profitability deteriorated sharply in 2025 as the company swung to a large net loss (net margin -14.1%) and negative operating profit despite mid-single-digit revenue growth (+6.1%). Prior years (2021–2024) were profitable with modest margins, but the trend shows weakening operating leverage: EBITDA margin fell from ~10–14% (2021–2024) to slightly negative in 2025. Gross margin has been relatively steady (~28–30%), suggesting the 2025 damage came below gross profit (operating costs/other charges), creating elevated earnings volatility.

Balance Sheet

Neutral

Leverage appears manageable on the latest balance sheet with debt-to-equity around 0.70 in 2025 (similar to 2021–2024), indicating a more balanced capital structure than 2020 (when debt-to-equity was ~1.87). However, returns to shareholders turned deeply negative in 2025 (ROE -23.7%) due to the net loss, and the balance sheet expanded materially versus 2024 (assets and equity up significantly), which raises execution and integration/valuation risk if earnings do not recover.

Cash Flow

Neutral

Operating cash flow held up in 2025 (~$1.7B), but free cash flow turned slightly negative (-$0.16B) and declined meaningfully versus the prior year (free cash flow growth -42.6%). Cash generation quality also weakened: operating cash flow covered a much smaller portion of earnings dynamics in 2025 versus 2021–2024, and the return to negative free cash flow reduces financial flexibility until profitability and spending normalize.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	24.90B	18.62B	18.92B	21.16B	19.36B
Gross Profit	7.35B	5.24B	3.85B	6.02B	5.53B
EBITDA	-138.00M	1.88B	2.27B	2.95B	2.64B
Net Income	-3.52B	557.00M	302.00M	1.50B	1.75B
Balance Sheet
Total Assets	37.96B	22.80B	23.26B	23.94B	25.24B
Cash, Cash Equivalents and Short-Term Investments	1.15B	1.17B	1.11B	804.00M	1.54B
Total Debt	10.80B	5.85B	5.91B	5.86B	5.82B
Total Liabilities	23.14B	14.63B	14.91B	15.44B	16.16B
Stockholders Equity	14.83B	8.17B	8.36B	8.50B	9.08B
Cash Flow
Free Cash Flow	-159.00M	757.00M	692.00M	1.24B	1.48B
Operating Cash Flow	1.70B	1.68B	1.83B	2.17B	2.03B
Investing Cash Flow	-1.02B	-808.00M	-668.00M	-608.00M	6.05B
Financing Cash Flow	-708.00M	-775.00M	-866.00M	-2.05B	-7.38B

International Paper Co Technical Analysis

Technical Analysis Sentiment

Positive

Last Price47.50

Price Trends

50DMA

40.77

Positive

100DMA

41.74

Positive

200DMA

44.50

Positive

Market Momentum

MACD

1.20

Negative

RSI

68.60

Neutral

STOCH

93.68

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IP, the sentiment is Positive. The current price of 47.5 is above the 20-day moving average (MA) of 42.80, above the 50-day MA of 40.77, and above the 200-day MA of 44.50, indicating a bullish trend. The MACD of 1.20 indicates Negative momentum. The RSI at 68.60 is Neutral, neither overbought nor oversold. The STOCH value of 93.68 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IP.

International Paper Co Risk Analysis

International Paper Co disclosed 22 risk factors in its most recent earnings report. International Paper Co reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

International Paper Co Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PKG	76 Outperform	$21.48B	27.82	―	2.42%	7.23%	-3.88%
CCK	71 Outperform	$12.72B	17.29	25.61%	1.01%	2.94%	893.70%
BALL	66 Neutral	$17.86B	20.20	16.17%	1.53%	2.87%	―
AMCR	64 Neutral	$22.37B	31.65	7.73%	6.20%	28.41%	-35.50%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SW	61 Neutral	$22.93B	30.85	4.11%	4.21%	―	―
IP	49 Neutral	$25.08B	-7.08	-24.51%	4.69%	33.71%	-517.99%

* Consumer Cyclical Sector Average

Performance Comparison

International Paper Co

47.50

-4.99

-9.51%

BALL

Ball

66.65

17.83

36.52%

CCK

Crown Holdings

110.29

22.87

26.16%

PKG

Packaging

238.71

39.07

19.57%

Smurfit Westrock

44.05

-4.91

-10.03%

AMCR

Amcor

48.41

1.23

2.60%

International Paper Co Corporate Events

Business Operations and StrategyM&A Transactions

International Paper Divests Global Cellulose Fibers to Refocus

Positive

Jan 23, 2026

On January 23, 2026, International Paper completed the sale of its Global Cellulose Fibers (GCF) business to funds affiliated with American Industrial Partners for $1.5 billion, including preferred stock with an initial liquidation preference of $190 million. The divested GCF unit, which produced high-quality and specialty pulp for hygiene, personal care, and industrial applications, generated approximately $2.3 billion in 2024 revenue from ongoing operations and employed about 3,300 people across nine manufacturing facilities and eight regional offices. By exiting the GCF business after previously closing certain mills in the segment, International Paper is further sharpening its portfolio around sustainable packaging and its core regional focus, potentially improving capital allocation and reinforcing its competitive positioning in its target markets.

The most recent analyst rating on (IP) stock is a Hold with a $3400.00 price target. To see the full list of analyst forecasts on International Paper Co stock, see the IP Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jan 30, 2026