Bull Of The Day: International Paper (IP)

Core Viewpoint - International Paper (IP) is recognized as a strong buy with a focus on renewable fiber-based products, including packaging and paper items, indicating a positive outlook for the stock [1] Company Overview - International Paper Co. specializes in producing renewable fiber-based packaging and pulp products, operating through segments such as Industrial Packaging and Global Cellulose Fibers [2] - The company was founded in 1898 and is headquartered in Memphis, TN [2] Earnings History - The company has a solid earnings history, surpassing the Zacks Consensus Estimate in 3 of the last 4 quarters, with a recent earnings gain of 44 cents against a consensus of 24 cents, resulting in an 83% positive earnings surprise [4] - The average earnings surprise over the last four quarters is 28% [4] Earnings Estimates Revisions - Recent earnings estimate revisions show an increase for the next quarter from $0.42 to$0.44, while the full year 2024 estimate decreased from $1.42 to$1.18, and next year's estimate increased from $2.92 to$3.02 [5] Growth Projections - Revenue for 2024 is projected to be around $18.7 billion, reflecting a contraction of just under 1$19.6 billion, indicating a growth of 4.7% [6] Valuation Metrics - The forward price-to-earnings (PE) ratio stands at 18.3x, which is considered high given the lack of growth in 2024, while the price-to-book ratio of 2.2x remains attractive for value-oriented investors [7] - The price-to-sales ratio is slightly above 1x, typical for commodity-based products [7] Margin Analysis - Operating margins are relatively thin, having decreased from 3.3% to 2.9% over the last two quarters, indicating a lack of competitive advantage [8]