10Y annualized return is
negative
at -0.7% per year
IP has met or exceeded earnings expectations in
the majority of
recent quarters (7/10)
Reasonable Price-to-Sales Ratio
Consistent Gross Profit Margin
Solid Current and Quick Ratios
Manageable Debt Levels
🏢 Strong Market Position
💡 Focused Strategy
🔧 Operational Improvements
📈 Growth through Acquisition
🛠️ Capital Investment in New Facilities
High Price-to-Earnings Ratio
Elevated EV/EBITDA Ratio
Low Operating and Net Profit Margins
Low Return on Equity
Low Cash Ratio
High Debt-to-Assets Ratio
⚠️ Underperformance in Volume
⏳ Slow Recovery from Underspending
📉 Uncertain Volume Recovery
🏗️ Challenges in Execution
International Paper demonstrates a solid business model with a strong market position and a focused strategy to enhance operational efficiency. However, challenges in volume recovery and historical underspending present risks that need to be managed as the company pursues its growth trajectory.
Analysis Date: January 30, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
International Paper Company is a big company that makes packaging products used to ship and protect items. They produce materials like cardboard for boxes and special pulp used in products like diapers and tissues. They sell their products to various businesses around the world, helping them package their goods safely. Founded in 1898 and based in Memphis, Tennessee, International Paper plays a key role in the packaging industry.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$61.73
Current Market Price: $72.91
IV/P Ratio: 0.85x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-18.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for IP
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (29.93)
P/B ratio ≤ 1.5 (2.04)
Current ratio ≥ 2.0 (1.51x)
Long-term debt < Net current assets (2.61x)
Margin of safety (-18.0%)
IP does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
6.62%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-29)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
25.29%
Higher values indicate better efficiency in production
TTM (as of 2025-04-29)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
2.99%
Higher values indicate better overall profitability
TTM (as of 2025-04-29)
A gross profit margin of 25.29% indicates that the company retains a good portion of revenue as profit after accounting for the cost of goods sold.
Both operating and net profit margins are at 2.99%, indicating limited profitability after accounting for operating expenses and taxes.
A return on equity of 6.62% suggests that the company is not effectively converting equity into profit, raising concerns about its capital efficiency.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.72x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.51x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
The current ratio of 1.51 and quick ratio of 1.09 indicate that the company has adequate short-term liquidity to cover its liabilities.
A debt-to-equity ratio of 0.72 suggests that the company maintains a balanced approach to leveraging, which is manageable in terms of financial risk.
A cash ratio of 0.27 indicates limited cash reserves relative to current liabilities, which might pose risks in tight liquidity situations.
A debt-to-assets ratio of 25.67% indicates a significant portion of assets is financed through debt, which could impact financial stability.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
International Paper (IP) is positioning itself as a global leader in sustainable packaging solutions, particularly in North America and EMEA. The acquisition of DS Smith is expected to enhance its market share and capabilities.
The company is adopting an 80/20 mindset to streamline operations, reduce complexity, and focus on profitable market share growth, which aligns with their customer-centric culture.
IP has identified operational inefficiencies costing $350 million due to lack of productivity and reliability and is taking steps to improve mill performance and reduce costs.
Volume declines were in line with expectations but reflect ongoing issues related to contract restructuring, indicating potential volatility in sales.
The company has acknowledged a history of underspending on capital investments, which may hinder short-term operational efficiency and growth.
The acquisition of DS Smith is expected to unlock significant synergies and expand IP's product offerings, enhancing their competitive advantage in the packaging market.
IP is investing in a state-of-the-art corrugated box facility in Waterloo, Iowa, which is projected to deliver 20% lower costs and improved product quality.
While the company anticipates improvements in volume, the timing of recovery remains uncertain, which could impact revenue in the near term.
The execution of operational improvements and capital investments may not be linear, indicating potential hurdles in achieving targeted outcomes.
