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International Paper Co (IP)
NYSE:IP
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International Paper Co
(NYSE:IP)
65Neutral
Positive Factors
Financial Performance
Guidance seems in-line or better than forecasts, which is expected to be received positively by the market.
Market Positioning
IP's net promoter score has nearly doubled over the past 2-3 years and now leads its peers, allowing IP to negotiate from a position of strength and drive share recovery.
Strategic Initiatives
The strategic review of Global Cellulose Fibers continues with interested parties in the due diligence phase, indicating potential future opportunities.
Negative Factors
Cash Flow
This year's free cash flow is guided at a lower range due to deal and restructuring-related spending.
Earnings Quality
There is a wide range of demand uncertainty affecting the company's earnings quality.
Market Share
Despite actions taken, such as mill closures and headcount reduction, IP's market share losses accelerated to about 5% and the margin gap with peers widened.
International Paper Co (IP) vs. S&P 500 (SPY)
Market Cap
$23.17B
Dividend Yield4.05%
Average Volume (3M)5.86M
Price to Earnings (P/E)27.9
Beta (1Y)0.65
Revenue Growth-1.57%
EPS Growth84.85%
CountryUS
Employees37,000
SectorConsumer Cyclical
Sector Strength62
IndustryPackaging & Containers
Share Statistics
EPS (TTM)1.57
Shares Outstanding527,875,730
10 Day Avg. Volume3,722,522
30 Day Avg. Volume5,859,096
Financial Highlights & Ratios
PEG Ratio0.33
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.11
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit4.89
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$58.09Price Target Upside26.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
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 Co generates revenue through the manufacturing and sale of fiber-based packaging, pulp, and paper products. The company's primary revenue streams include industrial packaging solutions, such as corrugated boxes and containerboard, which are used extensively in shipping and logistics. In addition to packaging, the company produces cellulose fibers, used in products like diapers, tissues, and other absorbent hygiene products. International Paper also earns from the sale of printing papers used in offices and commercial printing. The company's earnings are bolstered by its extensive global operations, strategic partnerships, and a focus on sustainability which appeals to environmentally conscious consumers and businesses.
International Paper Co Financial Statement Overview
Summary
International Paper presents a mixed financial performance with declining revenue and profitability but strong cash flow generation and a stable balance sheet. The company faces challenges in maintaining operational efficiency and profitability, but its strong cash generation provides a buffer. While the balance sheet remains stable with manageable leverage, the decreasing return on equity suggests a need for improvement in shareholder returns.Income Statement
International Paper's income statement reveals a declining trend in revenue with a decrease from $21.16 billion in 2022 to $18.62 billion in 2024. The gross profit margin for 2024 stands at 28.15%, and the net profit margin is 3.02%, showing a moderate level of profitability. However, the EBIT margin has dropped significantly from 9.15% in 2022 to 2.99% in 2024, indicating a decrease in operational efficiency. Overall, the company demonstrates a stable but declining revenue and profitability trajectory, posing a potential risk to financial performance.65
Positive
Balance Sheet
International Paper's balance sheet shows a debt-to-equity ratio of 0.72 as of 2024, indicating a moderate leverage level. The return on equity for 2024 is 6.88%, which is relatively low compared to previous years, reflecting reduced profitability. The equity ratio stands at 35.84%, suggesting a stable capital structure. Despite the company's manageable debt levels, the declining ROE raises concerns about shareholder returns.70
Positive
Cash Flow
The cash flow statement highlights a positive free cash flow growth rate from $692 million in 2023 to $1.678 billion in 2024, demonstrating strong cash generation capabilities. The operating cash flow to net income ratio is 2.99 in 2024, indicating robust cash generation compared to net income. The free cash flow to net income ratio of 2.99 further reinforces the company's solid liquidity position. Overall, while cash flow performance is strong, the sustainability of these levels remains a potential area of concern.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 18.62B | 18.92B | 21.16B | 19.36B | 20.58B | Gross Profit |
| 5.24B | 5.29B | 6.02B | 5.53B | 6.21B | EBIT |
| 557.00M | 1.19B | 1.94B | 1.67B | 1.72B | EBITDA |
| 1.88B | 2.27B | 2.99B | 2.54B | 2.06B | Net Income Common Stockholders |
| 557.00M | 288.00M | 1.50B | 811.00M | 482.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.17B | 1.11B | 804.00M | 1.54B | 5.45B | Total Assets |
| 22.80B | 23.26B | 23.94B | 25.24B | 31.72B | Total Debt |
| 5.85B | 5.91B | 5.86B | 5.82B | 14.72B | Net Debt |
| 4.68B | 4.79B | 5.06B | 4.52B | 14.13B | Total Liabilities |
| 14.63B | 14.91B | 15.44B | 16.16B | 23.85B | Stockholders Equity |
| 8.17B | 8.36B | 8.50B | 9.08B | 7.85B |
| Cash Flow | Free Cash Flow | |||
| 757.00M | 692.00M | 1.24B | 1.48B | 2.31B | Operating Cash Flow |
| 1.68B | 1.83B | 2.17B | 2.03B | 3.06B | Investing Cash Flow |
| -808.00M | -668.00M | -608.00M | 6.05B | -269.00M | Financing Cash Flow |
| -775.00M | -866.00M | -2.05B | -7.38B | -2.70B |
International Paper Co Technical Analysis
Negative
45.84
Price Trends
50.48
Negative
52.80
Negative
51.00
Negative
Market Momentum
-1.40
Negative
42.88
Neutral
26.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IP, the sentiment is Negative. The current price of 45.84 is below the 20-day moving average (MA) of 46.61, below the 50-day MA of 50.48, and below the 200-day MA of 51.00, indicating a bearish trend. The MACD of -1.40 indicates Negative momentum. The RSI at 42.88 is Neutral, neither overbought nor oversold. The STOCH value of 26.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $11.34B | 20.83 | 21.30% | 1.05% | 0.87% | 34.41% | |
73 Outperform | $16.99B | 21.15 | 19.03% | 2.73% | 9.47% | 19.39% | |
70 Outperform | $13.24B | 19.49 | 31.95% | 2.06% | 3.57% | 26.92% | |
65 Neutral | $23.17B | 27.91 | 3.01% | 4.05% | -1.57% | 84.85% | |
64 Neutral | $4.35B | 26.73 | 5.52% | 4.81% | -4.57% | ― | |
61 Neutral | $6.66B | 11.71 | 2.96% | 4.01% | 2.64% | -20.91% | |
56 Neutral | $20.81B | 16.48 | 20.71% | 5.56% | -3.54% | 25.25% |
* Consumer Cyclical Sector Average
Performance Comparison
IP
International Paper Co
45.84
10.90
31.20%
AVY
Avery Dennison
171.42
-46.38
-21.29%
CCK
Crown Holdings
96.94
15.44
18.94%
PKG
Packaging
187.42
15.46
8.99%
SON
Sonoco Products
44.71
-9.82
-18.01%
AMCR
Amcor
9.32
-0.22
-2.31%
International Paper Co Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: -3.76%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook, with significant achievements in cost reduction, integration of DS Smith, and improvements in customer experience and commercial performance. However, these were offset by challenges such as soft demand in key markets, economic uncertainties, and the impact of accelerated depreciation costs. The company remains focused on its transformation strategy and is cautious about the economic outlook.Q1-2025 Updates
Positive Updates
Strong Adjusted EBITDA Growth
International Paper's first quarter results showed higher sales and earnings driven by the DS Smith acquisition, sales price increases in North America, and benefits from transformation initiatives. The company reported an adjusted EBITDA run rate of nearly $800 million for the first half of the year, with expectations to accelerate to $1.1 billion by Q4.
Successful Integration of DS Smith
The integration of DS Smith has been successful, with a focus on achieving significant synergies. The contributions from the legacy DS Smith business accounted for $104 million for two months of the first quarter.
Cost Reduction Achievements
International Paper has made significant progress in cost reduction, achieving approximately $400 million of annual cost savings so far, with additional opportunities for $200 million of savings by the end of 2025.
Improved Customer Experience
The company has seen improvements in customer experience, with better service and on-time delivery resulting in a best-in-class Net Promoter Score.
Positive Commercial Progress in North America
The North American Packaging Solutions business closed its volume gap to market by approximately 500 basis points, showing better-than-expected commercial improvement.
Negative Updates
Soft Demand Across Markets
Industry demand in North America was down 2% in the first quarter, with similar softness in European markets. The company remains cautious about the outlook given strong negative consumer and business sentiment.
Accelerated Depreciation Costs
The company's earnings per share were impacted by accelerated depreciation charges related to footprint optimization initiatives, including $190 million associated with the closure of the Red River Mill.
Challenges in Economic Environment
The company highlighted external challenges, including economic noise and the impact of consumer sentiment, as well as the uncertainty caused by trade discussions.
Company Guidance
During International Paper's first quarter 2025 earnings call, CEO Andy Silvernail outlined the company's strategic goals and financial targets, emphasizing the deployment of an 80/20 approach to drive transformation and profitable growth. The company aims to achieve nearly $800 million in run-rate quarterly EBITDA in the first half of the year, accelerating to $1.1 billion by Q4. Despite a challenging macroeconomic environment, with North American industry demand down 2% in Q1 and European markets soft, International Paper remains focused on controlling costs and driving commercial excellence. The company targets $1.9 billion in cost reductions by 2027 and anticipates $600 million in commercial improvement benefits by the end of 2025. The integration of DS Smith is expected to contribute $600 million to $700 million in synergies. With a strong emphasis on customer experience and cost competitiveness, the company is confident in delivering its earnings targets, provided current demand levels persist.International Paper Co Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
International Paper Co Announces Leadership Changes
Positive
Feb 28, 2025
On February 28, 2025, International Paper announced leadership changes with Tim Nicholls promoted to Executive Vice President and President of DS Smith, and Lance Loeffler appointed as Senior Vice President and Chief Financial Officer. These appointments are expected to support International Paper’s strategic focus on sustainable packaging solutions and its growth in North America and EMEA, following the acquisition of DS Smith.
Executive/Board ChangesM&A TransactionsBusiness Operations and Strategy
International Paper Co Appoints David Robbie as Director
Positive
Feb 11, 2025
On February 11, 2025, International Paper’s Board of Directors appointed David A. Robbie as an independent director, effective immediately. Mr. Robbie, an experienced corporate leader, was also appointed to the Audit and Finance and Public Policy and Environment committees. His appointment follows International Paper’s acquisition of DS Smith, positioning the company as a global leader in sustainable packaging. Additionally, the Board approved a new Executive Severance Plan, replacing the 2005 policy, to provide enhanced severance benefits to executive officers, aiming to strengthen executive retention and compensation programs.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.