Upgrade in Stock Rating#
Wells Fargo has upgraded International Paper (NYSE:IP) from an Equal Weight to an Overweight rating. This change reflects the bank's confidence in the company's improved operations, particularly in North America. Along with the upgrade, Wells Fargo raised its price target for the stock from $38 to $39, indicating a potential upside from its current trading price of $31.76.
Operational Improvements#
Analyst Gabe Hajde noted that International Paper has made significant strides over the past two years, despite facing challenging economic conditions. These improvements have often gone unnoticed due to a shift in investor sentiment from optimistic to pessimistic. The company’s dividend yield of 5.82% offers a safety net for long-term investors, as it has consistently paid dividends for 56 years.
Financial Estimates#
Wells Fargo has also increased its earnings estimates for the company, projecting EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $3.12 billion for 2026 and $4.05 billion for 2027. The new price target of $39 is based on a multiple of 7.25 times the estimated EBITDA for 2027. The firm believes that International Paper can achieve significant year-over-year growth without relying on major improvements in the broader economy.
Recent Earnings Report#
In its recent Q1 2026 earnings report, International Paper posted earnings per share (EPS) of $0.15, slightly above the forecast of $0.14. However, the company fell short of revenue expectations, reporting $5.97 billion compared to an anticipated $6.01 billion. Additionally, Seaport Global Securities upgraded International Paper’s rating from Neutral to Buy, citing improvements in its competitive position and ongoing projects aimed at boosting earnings. These mixed results highlight both the challenges and opportunities facing International Paper.