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1. Company Snapshot

1.a. Company Description

International Paper Company operates as a packaging company primarily in United States, the Middle East, Europe, Africa, Pacific Rim, Asia, and rest of the Americas.It operates through two segments: Industrial Packaging and Global Cellulose Fibers.The Industrial Packaging segment manufactures containerboards, including linerboard, medium, whitetop, recycled linerboard, recycled medium, and saturating kraft.


The Global Cellulose Fibers segment provides fluff, market, and specialty pulps that are used in absorbent hygiene products, such as baby diapers, feminine care, adult incontinence, and other non-woven products; tissue and paper products; and non-absorbent end applications, including textiles, filtration, construction material, paints and coatings, reinforced plastics, and other applications.It sells its products directly to end users and converters, as well as through agents, resellers, and paper distributors.The company was founded in 1898 and is headquartered in Memphis, Tennessee.

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1.b. Last Insights on IP

International Paper's recent performance was negatively impacted by weak demand, lower volumes, and a quarterly loss of $0.43 per share, which lagged revenue estimates. The company's Q3 results were pressured by weak packaging demand despite growth from its DS Smith acquisition. IP's adjusted operating earnings (loss) was $(224) million, and it reduced its 2025 EBITDA guidance to $3.0 billion and 2027 target to $5.0 billion. The company is undergoing transformation, including cost-saving initiatives and divestment of Global Cellulose Fibers.

1.c. Company Highlights

2. International Paper's Q3 2025 Earnings: A Mixed Bag

International Paper reported a revenue of $4.6 billion in Q3 2025, slightly higher than the previous quarter, driven by strong price realization and stable volumes. However, the company's adjusted EPS came out at -$0.43, missing estimates of $0.53. EBITDA improved by 28% sequentially, and the margin expanded by approximately 300 basis points. The company's EBITDA margin is a positive sign, but the negative EPS is a concern.

Publication Date: Nov -03

📋 Highlights
  • EBITDA Growth & Margin Expansion:: Third quarter EBITDA improved by 28% with a 300 bps margin expansion, driven by cost initiatives and pricing.
  • EMEA Outlook:: Fourth quarter EMEA EBITDA guidance set at $230M, with $500M in 2026 EBITDA benefits from cost actions (83% of $600M target).
  • Cost-Out Initiatives:: $600M incremental EBITDA target by 2026, including $500M from cost reductions and plant closures in Europe.
  • North America Momentum:: Expected 2% outperformance vs. 1% market growth in 2026, with $655M adjusted EBITDA in Q3 (up 40% YoY).
  • Strategic Investments:: $400M waste capture plan and $20% ROI Riverdale conversion project, targeting $5B EBITDA by 2027 despite 2025 revisions.

Segment Performance

The Packaging Solutions North America segment reported adjusted EBITDA of $655 million in Q3 2025, with a guidance of $600 million for Q4 2025. The EMEA segment reported EBITDA growth and margin expansion, despite soft demand, with a guidance of $230 million for Q4 2025. The company's EMEA business is facing challenges, but the cost-out actions are expected to drive benefits.

Transformation Journey

International Paper is making progress on its transformation journey, with a focus on cost initiatives, simplification, and resource allocation. The company expects to realize $600 million of incremental adjusted EBITDA in 2026, with the majority coming from cost actions. As Andrew Silvernail mentioned, "We've reversed the spiral in 18 months. EBITDA is up 40% year-over-year through the third quarter, and we've gone from losing market share to winning it."

Valuation and Outlook

International Paper's valuation metrics are mixed, with a P/E Ratio of -15.95, P/B Ratio of 1.18, and EV/EBITDA of 13.55. The company's Net Debt / EBITDA ratio is 4.28, which is a concern. Analysts estimate revenue growth of 1.4% for next year. The company's long-term ambitions remain, with a target of $5 billion in EBITDA in 2027. However, the softer market has delayed progress, and the company has adjusted its targets for 2025 and 2027.

Cost Optimization and Restructuring

International Paper is accelerating its cost-out initiatives, including proposed closures in Europe and a plan to consolidate from 13 to 7 subregions in EMEA. The company is also launching Lighthouse pilots in Spain and the UK, with plans to expand across EMEA next year. The cost optimization efforts are expected to drive benefits, but the restructuring costs are a short-term headwind.

3. NewsRoom

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International Paper Company (IP) Presents at Citigroup 2025 Basic Materials Conference Transcript

Dec -03

Source: seekingalpha.com

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Here are Monday's Top Wall Street Analyst's Research Calls: Baidu, Carvana, Exact Sciences, Ferrari, Marvell Technology, Meta Platforms and More

Nov -24

Source: 247wallst.com

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Why Are These 4 Dividend Stocks Still Trading At A Deep Discount?

Nov -17

Source: forbes.com

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International Paper Company (NYSE:IP) Given Consensus Rating of “Hold” by Brokerages

Nov -15

Source: defenseworld.net

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AI Stocks Fade, Other Stocks Shine

Nov -14

Source: forbes.com

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International Paper Announces Closures of Compton, California and Louisville, Kentucky Packaging Facilities as Part of Strategic Growth Initiative in North America

Nov -14

Source: prnewswire.com

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International Paper Company (IP) Presents at Baird 55th Annual Global Industrial Conference Transcript

Nov -11

Source: seekingalpha.com

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International Paper CFO to Speak at the Citi 2025 Basic Materials Conference

Nov -04

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.36%)

6. Segments

Industrial Packaging

Expected Growth: 3.5%

The 3.5% growth in Industrial Packaging from International Paper Company is driven by increasing demand for e-commerce packaging, growth in the global manufacturing sector, and a shift towards sustainable packaging solutions. Additionally, the company's strategic investments in innovation and operational efficiency have improved productivity and reduced costs, contributing to the segment's growth.

Global Cellulose Fibers

Expected Growth: 2.8%

The 2.8% growth of Global Cellulose Fibers from International Paper Company is driven by increasing demand for sustainable packaging, rising adoption of eco-friendly products, and growing consumer preference for natural fibers. Additionally, expansion in the textile industry, particularly in Asia, and investments in research and development to improve fiber quality and production efficiency also contribute to this growth.

Corporate and Intersegment Sales

Expected Growth: 2.2%

International Paper Company's 2.2% corporate and intersegment sales growth is driven by increasing demand for packaging solutions, particularly in e-commerce and foodservice sectors. Additionally, strategic acquisitions, operational efficiencies, and favorable foreign exchange rates contribute to the growth. Furthermore, the company's focus on innovation and sustainability initiatives also supports revenue expansion.

7. Detailed Products

Containerboard

A type of paperboard used to manufacture corrugated containers, such as boxes and packaging materials.

Kraft Paper

A strong, durable, and versatile paper used for packaging, wrapping, and construction applications.

Pulp Products

A range of products derived from wood pulp, including fluff pulp, recycled pulp, and specialty pulp.

Paperboard

A dense, stiff paperboard used for packaging, graphic arts, and specialty applications.

Recycled Fiber

A sustainable and environmentally friendly product made from recycled paper and cardboard.

Cellulose Fibers

A range of fibers derived from wood pulp, used in various industrial and consumer applications.

Bleached Board

A high-quality, white paperboard used for packaging, printing, and converting applications.

Coated Paperboard

A paperboard coated with a layer of clay, latex, or other materials to enhance printability and durability.

8. International Paper Company's Porter Forces

Forces Ranking

Threat Of Substitutes

International Paper Company faces moderate threat from substitutes, as customers can opt for digital alternatives or other paper products. However, the company's diversified product portfolio and strong brand presence mitigate this threat.

Bargaining Power Of Customers

International Paper Company's customers have limited bargaining power due to the company's large scale of operations and diversified customer base. This reduces the risk of customers negotiating lower prices or demanding better services.

Bargaining Power Of Suppliers

International Paper Company's suppliers have moderate bargaining power, as the company relies on a few large suppliers for raw materials. However, the company's long-term contracts and diversified supply chain mitigate this risk.

Threat Of New Entrants

International Paper Company faces low threat from new entrants, as the paper industry has high barriers to entry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

International Paper Company operates in a highly competitive industry, with several established players vying for market share. The company must focus on differentiating its products and services to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 48.33%
Debt Cost 6.41%
Equity Weight 51.67%
Equity Cost 9.14%
WACC 7.82%
Leverage 93.54%

11. Quality Control: International Paper Company passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Greif

A-Score: 5.6/10

Value: 6.9

Growth: 4.2

Quality: 4.2

Yield: 7.0

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Graphic Packaging

A-Score: 5.3/10

Value: 8.0

Growth: 6.4

Quality: 4.2

Yield: 4.0

Momentum: 1.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
International Paper

A-Score: 5.1/10

Value: 7.3

Growth: 2.6

Quality: 2.9

Yield: 8.0

Momentum: 4.0

Volatility: 6.0

1-Year Total Return ->

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Berry Global

A-Score: 5.1/10

Value: 6.0

Growth: 5.8

Quality: 4.3

Yield: 2.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

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Silgan

A-Score: 4.4/10

Value: 4.5

Growth: 5.2

Quality: 3.9

Yield: 3.0

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

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WestRock

A-Score: 3.4/10

Value: 4.9

Growth: 2.7

Quality: 2.7

Yield: 2.0

Momentum: 5.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

39.06$

Current Price

39.06$

Potential

-0.00%

Expected Cash-Flows