Market Inference Overview — IP Stock

Now trading at a price of $37.06, International Paper Company has moved -1.87% so far today. In contrast, the S&P 500 index moved 0.7%. Read below for a basic value analysis of International Paper Company.

International Paper Company shares moved -6.46% over the last 52 weeks, with a high of $48.0 and a low of $29.93. During this time, the stock lagged the S&P 500 index by -2.76%. As of January 2022, the company's 50-day average price is $37.41. The International Paper Company (NYSE: IP) is an American pulp and paper company, the largest such company in the world. The large-cap Industrials company is based in Memphis, TN. International Paper Company has returned a 5.04% dividend yield over the last 12 months.

SOperating Margins Consistently Higher Than the 9.43% Industry Average:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $44,282 $40,947 $39,054 $42,080
Revenue Growth n/a -7.53% -4.62% 7.75%
Gross Margins 61.18% 60.63% 59.76% 60.79%
Gross Margins Growth n/a -0.9% -1.43% 1.72%
Operating Margins 56.96% 56.36% 55.03% 57.26%
Operating Margins Growth n/a -1.05% -2.36% 4.05%
Earnings Per Share $2.73 $1.07 $3.9 $3.35
EPS Growth n/a -60.81% 264.49% -14.1%
Free Cash Flow (MM) $2,473 $2,400 $1,550 $1,243
FCF Growth n/a -2.95% -35.42% -19.81%
Capital Expenditures (MM) $1,137 $663 $480 $931
Net Debt / EBITDA 7.39 10.67 2.56 3.67

International Paper Company Is Reasonably Valued:

Compared to the Industrials sector's average of 20.49, International Paper Company has a trailing twelve month P/E ratio of 7.6 and, according to its EPS guidance of 3.0, an expected P/E ratio of 12.35.

However, International Paper Company is likely undervalued in terms of its equity because its P/B ratio is 1.391 compared to its sector average of 3.78. The company's shares are currently trading -10.04% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:

√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 3.11 * 24.26) = $41.2

International Paper Company Is the Subject of Mixed Market Indicators:

9 analysts are following International Paper Company and have set target prices ranging from $32.0 to $44.0 per share. On average, they have given the company a rating of hold. At the current price of $37.06, IP is trading -4.96% away from its average analyst target price of $39.0 per share, implying an analyst consensus of some upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.