International Paper Company Just Missed Earnings - But Analysts Have Updated Their Models

Last week, you might have seen that International Paper Company (NYSE:IP) released its full-year result to the market. The early response was not positive, with shares down 6.2% to US$55.63 in the past week. It looks like a pretty bad result, all things considered. Although revenues of US$19b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 20% to hit US$1.57 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for International Paper

Taking into account the latest results, the current consensus from International Paper's seven analysts is for revenues of US$19.7b in 2025. This would reflect a satisfactory 5.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 177% to US$2.93. In the lead-up to this report, the analysts had been modelling revenues of US$19.7b and earnings per share (EPS) of US$3.04 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at US$56.36, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values International Paper at US$66.00 per share, while the most bearish prices it at US$45.90. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that International Paper is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.6% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.3% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.3% annually. So it looks like International Paper is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for International Paper. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$56.36, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on International Paper. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple International Paper analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 4 warning signs for International Paper you should be aware of, and 2 of them can't be ignored.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.