What Happened?
Shares of packaging and materials company International Paper (NYSE:IP) jumped 3% in the afternoon session after analysts at BNP Paribas upgraded the stock to an “outperform” rating from a previous “strong sell” rating. The firm also set a new price target of $44.00 for the stock. This change in outlook reflected growing confidence in the company's direction. Other analysts also noted the company's focus on transformation and sustainable packaging solutions. The leadership’s emphasis on simplifying the business structure and improving operations was seen as a positive step toward becoming a leader in the industry.
After the initial pop the shares cooled down to $39.03, up 3.1% from previous close.
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What Is The Market Telling Us
International Paper’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 19 days ago when the stock dropped 2.3% on the news that investor concerns grew as a report highlighted the company as the most shorted stock in the materials sector for the third consecutive month. The report noted that short interest in the company reached 10.04% of its total float. This bearish sentiment appeared to be linked to the company's financial health, which was under scrutiny. International Paper reported a 3-year revenue growth rate of 2.1%, while its earnings per share experienced a decline of 14.9% over the same period. Broader industry headwinds also weighed on the sector, with pulp and paper producers navigating challenges from tariffs and weak demand that squeezed margins.
International Paper is down 26.6% since the beginning of the year, and at $39.03 per share, it is trading 35.1% below its 52-week high of $60.09 from January 2025. Investors who bought $1,000 worth of International Paper’s shares 5 years ago would now be looking at an investment worth $808.98.
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