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By How Much Did Deutsche Bank Reduce IP’s Price Target?

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Price movement

International Paper Company (IP) has a market capitalization of $16.8 billion. It fell by 2.2% to close at $40.29 per share on May 18, 2016.

The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -5.9%, -6.1%, and 8.2%, respectively, as of the same date. This means that IP is trading 5.6% below its 20-day moving average, 2.7% below its 50-day moving average, and 1.5% above its 200-day moving average.

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Related ETFs and peers

The Guggenheim Timber ETF (CUT) invests 4.0% of its holdings in International Paper. The ETF tracks the Beacon Global Timber Index, an index that uses a multifactor selection process to identify global timber stocks with the greatest risk-to-return potential. The YTD price movement of CUT was -2.5% as of May 18, 2016.

The market capitalizations of International Paper’s competitors are as follows:

  • Packaging Corporation of America (PKG) — $6.2 billion
  • Domtar (UFS) — $2.3 billion
  • KapStone Paper and Packaging (KS) — $1.4 billion

Deutsche Bank’s price target for International Paper

Deutsche Bank has reduced its price target for International Paper to $40 from $42 per share. It has also maintained its rating of “hold” on the stock.

TheStreet Ratings rated International Paper as a “buy” with a “B” score.

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Performance in 1Q16

International Paper reported 1Q16 net sales of $5.1 billion, a fall of 7.4% from its net sales of $5.5 billion in 1Q15. Sales from the industrial packaging, printing paper, and consumer packaging segments fell by 2.8%, 3.6%, and 36.4%, respectively, between 1Q15 and 1Q16. The company reported net losses on sales and business impairments of $37.0 million in 1Q16.

IP’s net income and EPS (earnings per share) rose to $334.0 million and $0.81, respectively, in 1Q16, compared to $313.0 million and $0.74, respectively, in 1Q15.

International Paper’s cash and temporary investments rose by 10%, and its inventories fell by 0.49% between 1Q15 and 1Q16. In 1Q16, its current ratio rose to 1.66x, and its long-term debt-to-equity ratio fell to 2.1x, compared to its current and long-term debt-to-equity ratios of 1.65x and 2.3x, respectively, in 4Q15. It reported free cash flow of $311.0 million in 1Q16.

Quarterly dividend

International Paper declared a quarterly dividend of $0.44 per share on its common stock. The dividend will be paid on June 15, 2016, to shareholders on record at the close of business on May 27, 2016.

Now let’s take a look at Whirlpool.

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