Valued at a market cap of $17.5 billion, International Paper Company (IP) is one of the world’s largest producers of fiber-based packaging, pulp, and paper products. Headquartered in Memphis, Tennessee, the company manufactures sustainable packaging solutions used across e-commerce, consumer goods, food and beverage, industrial shipping, and printing applications.
This packaging company has significantly underperformed the broader market over the past 52 weeks. Shares of IP have declined 26.5% over this time frame, while the broader S&P 500 Index ($SPX) has surged 30.6%. Moreover, on a YTD basis, the stock is down 16.2%, compared to SPX’s 8.8% uptick.
Narrowing the focus, IP has also considerably lagged behind State Street Consumer Discretionary Select Sector SPDR ETF’s (XLY) 19.3% return over the past 52 weeks.
On Apr. 30, International Paper reported mixed FY2026 Q1 results, triggering sharp volatility in the stock. Shares initially plunged 9.4% after the earnings release before rebounding with a 4.4% gain in the following trading session as investors weighed the company’s improving operations against a softer outlook. Net sales climbed 13.4% year over year to $5.97 billion, fueled by acquired businesses and stronger packaging volumes, although it came in slightly below Wall Street expectations of $6.01 billion. Meanwhile, adjusted EPS of $0.15 modestly topped analyst estimates, supported by operational efficiencies and productivity improvements.
Despite the earnings beat, International Paper continued to face significant headwinds during the quarter. Management highlighted approximately $53 million in weather-related disruptions, along with elevated freight and energy costs, persistent inflationary pressures, and higher restructuring and transformation expenses. Adding to investor concerns, the company struck a more cautious tone for the remainder of FY2026, lowering its full-year adjusted EBITDA guidance to a range of $3.2 billion to $3.5 billion from its previous outlook of $3.5 billion to $3.7 billion due to ongoing macroeconomic uncertainty, volatile input costs, and uneven demand across packaging markets.
For the current fiscal year, ending in December, analysts expect IP’s EPS to grow 815% year over year to $1.43. The company’s earnings surprise history is disappointing. It missed the consensus estimates in all of the last four quarters.
Among the 13 analysts covering the stock, the consensus rating is a "Moderate Buy,” which is based on eight “Strong Buy,” one "Moderate Buy,” three “Hold,” and one "Strong Sell” rating.
This configuration is slightly more bullish than a month ago, with six analysts suggesting a “Strong Sell” rating.
On May 5, UBS analyst Anojja Shah reiterated a “Neutral” rating on International Paper, while lowering the firm’s price target to $32 from $40, reflecting a more cautious outlook on the company’s near-term earnings and industry conditions.
The mean price target of $41.64 represents a 26.1% premium over IP’s current price, while the Street-high price target of $50.70 suggests an upside potential of 53.5%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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