International Paper (NYSE:IP) Shares Gap Down - What's Next?

Key Points

• International Paper shares gapped down from a $33.38 close to a $31.15 open, despite later trading near $33.17.
• Third-quarter adjusted EPS was $0.37, beating the $0.29 consensus, while North American Packaging Solutions profit more than doubled to $427 million. However, revenue missed estimates at $6.20 billion and declined slightly year over year.
• The company reported a $1.13 billion net loss, largely due to a $1.38 billion goodwill impairment tied to its EMEA packaging business. Analysts still give the stock a “Moderate Buy” consensus with an average $46.90 price target, and the company announced a $0.4625 quarterly dividend.

Shares of International Paper Company (NYSE:IP - Get Free Report) gapped down prior to trading on Wednesday. The stock had previously closed at $33.38, but opened at $31.15. International Paper shares last traded at $33.1720, with a volume of 5,367,221 shares trading hands.

International Paper News Summary

Here are the key news stories impacting International Paper this week:

• Positive Sentiment: International Paper reported adjusted earnings of $0.37 per share, above the $0.29 Wall Street consensus and a significant improvement from the $0.43-per-share loss reported a year earlier. International Paper adjusted EPS report
• Positive Sentiment: Packaging Solutions North America operating profit rose to $427 million, compared with $204 million in the prior quarter, indicating stronger performance in a key business. Management also targeted fourth-quarter operating profit of $460 million to $500 million and full-year profit of $1.3 billion to $1.4 billion. International Paper third-quarter results
• Neutral Sentiment: International Paper is preparing to separate its EMEA packaging business into an independent company, DS Smith plc. The restructuring may sharpen the company’s focus on North America, but it also removes EMEA from future financial guidance and creates execution and regulatory risks. International Paper third-quarter net loss report
• Negative Sentiment: Revenue totaled $6.20 billion, below the $6.28 billion estimate and down slightly year over year, signaling limited top-line growth. International Paper revenue report
• Negative Sentiment: The company posted a $1.13 billion net loss, including a $1.38 billion non-cash goodwill impairment tied to the EMEA packaging segment. Operating cash flow was $339 million, while free cash flow was negative $267 million, raising concerns about profitability and cash generation. International Paper results and impairment

Wall Street Analysts Forecast Growth

Several equities research analysts recently issued reports on IP shares. Bank of America raised shares of International Paper from a "neutral" rating to a "buy" rating and set a $46.00 price target on the stock in a report on Friday, September 11th. Argus reaffirmed a "buy" rating and issued a $45.00 price objective on shares of International Paper in a research note on Thursday, September 24th. Truist Financial dropped their price objective on shares of International Paper from $49.00 to $41.00 and set a "buy" rating for the company in a report on Monday, October 12th. Wall Street Zen downgraded shares of International Paper from a "hold" rating to a "sell" rating in a research report on Saturday, October 3rd. Finally, Weiss Ratings lowered shares of International Paper from a "sell (d+)" rating to a "sell (d)" rating in a report on Thursday, October 8th. Ten research analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat, the company presently has an average rating of "Moderate Buy" and an average target price of $46.90.

International Paper Stock Performance

The company has a debt-to-equity ratio of 0.57, a current ratio of 1.10 and a quick ratio of 0.84. The company has a 50 day simple moving average of $35.25 and a 200-day simple moving average of $37.54. The firm has a market cap of $17.80 billion, a PE ratio of -5.15, a price-to-earnings-growth ratio of 4.38 and a beta of 0.93.

International Paper (NYSE:IP - Get Free Report) last released its quarterly earnings data on Wednesday, October 28th. The basic materials company reported $0.37 earnings per share for the quarter, beating analysts' consensus estimates of $0.29 by $0.08. The business had revenue of $6.20 billion during the quarter, compared to analyst estimates of $6.28 billion. International Paper had a negative net margin of 14.20% and a negative return on equity of 1.09%. International Paper's revenue was down .4% compared to the same quarter last year. During the same period last year, the business earned ($0.43) EPS. As a group, equities research analysts anticipate that International Paper Company will post 1.26 EPS for the current year.

International Paper Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 15th. Stockholders of record on Monday, November 16th will be given a dividend of $0.4625 per share. The ex-dividend date is Monday, November 16th. This represents a $1.85 dividend on an annualized basis and a dividend yield of 5.5%. International Paper's dividend payout ratio (DPR) is presently -28.37%.

Insider Buying and Selling at International Paper

In other news, VP William Hamic sold 24,500 shares of the business's stock in a transaction dated Friday, August 7th. The shares were sold at an average price of $41.20, for a total value of $1,009,400.00. Following the sale, the vice president directly owned 106,952 shares in the company, valued at $4,406,422.40. The trade was a 18.64% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Also, CAO Holly G. Goughnour sold 3,500 shares of International Paper stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $41.96, for a total transaction of $146,860.00. Following the completion of the transaction, the chief accounting officer directly owned 34,248 shares in the company, valued at approximately $1,437,046.08. The trade was a 9.27% decrease in their position. The SEC filing for this sale provides additional information. 0.21% of the stock is owned by company insiders.

Institutional Investors Weigh In On International Paper

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Man Group plc purchased a new stake in shares of International Paper during the second quarter worth $24,640,000. Mitchell & Pahl Private Wealth LLC purchased a new position in International Paper in the third quarter valued at about $2,122,000. The Manufacturers Life Insurance Company increased its position in International Paper by 50.0% in the 2nd quarter. The Manufacturers Life Insurance Company now owns 1,167,393 shares of the basic materials company's stock worth $44,478,000 after purchasing an additional 389,092 shares during the last quarter. Amundi acquired a new position in International Paper in the 2nd quarter worth about $82,666,000. Finally, HighTower Advisors LLC purchased a new stake in shares of International Paper during the 2nd quarter worth about $1,603,000. Hedge funds and other institutional investors own 81.95% of the company's stock.

International Paper Company Profile

International Paper NYSE: IP is a global producer of sustainable packaging, pulp and paper products. Its offerings include corrugated packaging and containerboard used to protect and transport goods, as well as absorbent cellulose fibers and other fiber-based materials used in personal care, healthcare, foodservice and industrial applications.

The company serves customers across North America and Europe, with products sold to manufacturers, retailers, consumer-goods companies and other commercial customers.

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