IP Investors, You Need to Know These Facts Today.

International Paper Company logged a -0.6% change during today's morning session, and is now trading at a price of $31.14 per share.

As of April 2023, the company's 50-day average price was $31.78. International Paper Company produces renewable fiber-based packaging and pulp products in North America, Latin America, Europe, and North Africa. Based in Memphis, TN, the large-cap Basic Materials company has 39,000 full time employees. International Paper Company has offered a 5.9% dividend yield over the last 12 months.

A Deteriorating Pattern of Cash Flows With a Downwards Trend:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $22,376 $20,580 $19,363 $21,161
Gross Margins 31.8% 30.2% 28.6% 28.4%
Operating Margins 10.8% 8.2% 7.6% 8.3%
Net Margins 5.47% 2.34% 9.05% 7.11%
Net Income (MM) $1,225 $482 $1,752 $1,504
Net Interest Expense (MM) -491 -444 -337 -325
Net Interest Expense (MM) -$491 -$444 -$337 -$325
Depreciation & Amort. (MM) -$1,306 -$1,287 -$1,210 -$1,040
Earnings Per Share $3.07 $1.22 $4.47 $4.57
EPS Growth n/a -60.26% 266.39% 2.24%
Diluted Shares (MM) 399 396 392 347
Free Cash Flow (MM) $2,334 $2,312 $1,481 $1,243
Capital Expenditures (MM) -$1,276 -$751 -$549 -$931
Net Current Assets (MM) -$19,114 -$12,614 -$9,065 -$8,673
Current Ratio 0.77 1.36 1.71 1.35
Long Term Debt (MM) $11,682 $10,156 $5,383 $4,816
Net Debt / EBITDA 4.26 5.62 1.23 1.81

International Paper Company has slimmer gross margins than its peers, a deteriorating pattern of cash flows, and a highly leveraged balance sheet. On the other hand, the company has a strong EPS growth trend working in its favor. Furthermore, International Paper Company has stable revenues and decreasing reinvestment in the business, weak operating margings with a negative growth trend, and just enough current assets to cover current liabilities.

International Paper Company Is Potentially Undervalued and Trades Below Its Graham Number:

International Paper Company has a trailing twelve month P/E ratio of 7.0, compared to an average of 10.03 for the Basic Materials sector. Based on its EPS guidance of $2.36, the company has a forward P/E ratio of 13.5. The -5.1% compound average growth rate of International Paper Company's historical and projected earnings per share yields a PEG ratio of -1.36. This indicates that its shares are overvalued.In contrast, the market is likely undervaluing International Paper Company in terms of its equity because its P/B ratio is 1.29 while the sector average is 2.08. The company's shares are currently trading -26.8% below their Graham number.

Analysts Give International Paper Company an Average Rating of Hold:

The 9 analysts following International Paper Company have set target prices ranging from $24.0 to $42.0 per share, for an average of $32.78 with a hold rating. As of April 2023, the company is trading -3.1% away from its average target price, indicating that there is an analyst consensus of some upside potential.

International Paper Company has an average amount of shares sold short because 3.5% of the company's shares are sold short. Institutions own 88.2% of the company's shares, and the insider ownership rate stands at 0.4%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 12% stake in the company is worth $1,314,887,097.

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.