International Paper logged a 1.7% change during today's morning session, and is now trading at a price of $43.63 per share.
International Paper returned gains of 40.8% last year, with its stock price reaching a high of $47.4 and a low of $30.78. Over the same period, the stock outperformed the S&P 500 index by 16.6%. More recently, the company's 50-day average price was $42.86. International Paper Company produces and sells 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 has offered a 4.3% dividend yield over the last 12 months.
The Company's Revenues Are Declining:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $23,306 | $18,317 | $17,565 | $19,363 | $21,161 | $18,916 |
| Operating Margins | 8% | 5% | 2% | 5% | 7% | 2% |
| Net Margins | 9% | 7% | 3% | 9% | 7% | 2% |
| Net Income (M) | $2,012 | $1,220 | $482 | $1,752 | $1,504 | $288 |
| Net Interest Expense (M) | -$536 | -$499 | -$446 | -$337 | -$325 | -$231 |
| Depreciation & Amort. (M) | $1,328 | $1,072 | $1,091 | $1,097 | $1,040 | $1,432 |
| Diluted Shares (M) | 414 | 399 | 396 | 392 | 367 | 349 |
| Earnings Per Share | $4.85 | $3.07 | $1.22 | $4.47 | $4.1 | $0.82 |
| EPS Growth | n/a | -36.7% | -60.26% | 266.39% | -8.28% | -80.0% |
| Avg. Price | $39.58 | $34.76 | $32.74 | $48.32 | $43.4 | $43.63 |
| P/E Ratio | 8.06 | 11.21 | 26.62 | 10.74 | 10.48 | 52.57 |
| Free Cash Flow (M) | $1,654 | $2,473 | $2,400 | $1,550 | $1,243 | $692 |
| CAPEX (M) | $1,572 | $1,137 | $663 | $480 | $931 | $1,141 |
| EV / EBITDA | 8.49 | 11.62 | 14.3 | 10.72 | 7.83 | 10.87 |
| Total Debt (M) | $10,654 | $9,765 | $8,068 | $5,579 | $5,579 | $5,593 |
| Net Debt / EBITDA | 3.24 | 4.64 | 5.26 | 2.04 | 1.87 | 2.47 |
| Current Ratio | 1.49 | 0.77 | 1.36 | 1.71 | 1.35 | 1.67 |
International Paper's financial statements include several red flags such as declining revenues and decreasing reinvestment in the business, weak operating margins with a negative growth trend, and declining EPS growth. Additionally, the firm has positive cash flows. On the other hand, the company benefits from a decent current ratio of 1.67 and healthy leverage levels.
a Lower P/B Ratio Than Its Sector Average but Its Shares Are Expensive:
International Paper has a trailing twelve month P/E ratio of 80.9, compared to an average of 22.71 for the Basic Materials sector. Based on its EPS guidance of $2.94, the company has a forward P/E ratio of 14.6. The -6.9% compound average growth rate of International Paper's historical and projected earnings per share yields a PEG ratio of -11.72. This indicates that its shares are overvalued.In contrast, the market is likely undervaluing International Paper in terms of its equity because its P/B ratio is 1.84 while the sector average is 3.12. The company's shares are currently trading 107.7% below their Graham number.
There's an Analyst Consensus of Some Upside Potential for International Paper:
The 9 analysts following International Paper have set target prices ranging from $40.0 to $57.0 per share, for an average of $46.9 with a hold rating. The company is trading -7.0% away from its average target price, indicating that there is an analyst consensus of some upside potential.
International Paper has an above average percentage of its shares sold short because 8.4% of the company's shares are sold short. Institutions own 88.7% of the company's shares, and the insider ownership rate stands at 0.44%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 12% stake in the company is worth $1,770,845,713.
