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Jefferies Upgrades International Paper to ‘Buy’

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Jan. 24 2017, Updated 10:38 a.m. ET

Price movement

International Paper Company (IP) has a market cap of $22.1 billion. It rose 1.9% to close at $53.69 per share on January 20, 2017. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.04%, 0.02%, and 1.2%, respectively, on the same day.

IP is trading 0.16% above its 20-day moving average, 4.8% above its 50-day moving average, and 17.5% above its 200-day moving average.

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Related ETF and peers

The Guggenheim MSCI Global Timber ETF (CUT) invests 5.6% of its holdings in International Paper. The YTD price movement of CUT was 3.0% on January 20.

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

  • Packaging Corporation of America (PKG) — $8.1 billion
  • Domtar Corporation (UFS) — $2.5 billion
  • KapStone Paper and Packaging (KS) — $2.1 billion

IP’s rating

On January 20, 2017, Jefferies upgraded International Paper’s rating to “buy” from “hold.” It also increased the stock’s price target to $65.0 from $55.0 per share.

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3Q16 performance

International Paper reported 3Q16 net sales of $5.3 billion—a fall of 7.5% from its net sales of $5.7 billion in 3Q15. Sales from the Industrial Packaging and Consumer Packaging segments fell 1.6% and 38.9%, respectively, while sales from the Printing Papers segment rose 0.64% in 3Q16 over 3Q15.

Its net income and EPS (earnings per share) rose to $312 million and $0.75, respectively, in 3Q16, as compared to $220 million and $0.53, respectively, in 3Q15. It reported adjusted operating EPS of $0.91 in 3Q16—a fall of 6.2% from 3Q15.

IP’s cash and temporary investments rose 144.0%. Its inventories fell 0.27% between 3Q16 and 4Q15.

Quarterly dividends

International Paper has declared a quarterly dividend of $0.4625 per share on its common stock. The dividend will be paid on March 15, 2017, to shareholders of record at the close of business on February 15, 2017.

The company has also declared a regular quarterly dividend of $1.00 per share on its cumulative $4.00 preferred stock. The dividend will be paid on March 15, 2017, to shareholders of record at the close of business on February 15, 2017.

Now we’ll look at J.M. Smucker (SJM).

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