International Paper (IP): Assessing Valuation After $1B Loss, Guidance Cuts, and Restructuring News

International Paper (IP) grabbed headlines after it announced a net earnings loss of over $1 billion for the third quarter. The company also released new guidance cuts and broad restructuring plans, including mill closures and layoffs.

See our latest analysis for International Paper.

The recent wave of restructuring news and third-quarter losses has kept International Paper squarely in the spotlight, with investors responding swiftly as shares dropped nearly 20% over the past month alone. While the one-year total shareholder return stands at -29%, longer-term holders have still eked out gains, as the three-year total shareholder return remains positive. Momentum, however, has clearly faded in the short term as uncertainty around the transformation and future profitability weighs on sentiment.

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With shares trading at a steep discount after a string of setbacks, is International Paper now a bargain that could surprise on the upside? Or are markets already factoring in the company’s toughest days ahead?

Most Popular Narrative: 26% Undervalued

International Paper’s most widely followed valuation narrative finds the fair value notably higher than its last close, hinting that the market may be missing something significant beneath recent volatility. Here is a direct look at one of the catalysts behind this assessment:

The company’s substantial capital investments in automation, advanced manufacturing, and mill reliability, funded by targeted asset divestitures and plant closures, are expected to reduce operating costs and materially expand net margins over the next several years.

Read the complete narrative.

Wondering how aggressive transformation and bold profit turnaround assumptions stack up in the latest model? There is a blueprint within the narrative—including profit multiples and revenue increases—that could change your view of where fair value really lies. Want to see what actually powers that upside?

Result: Fair Value of $52.20 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, chronic mill reliability problems and persistent market sluggishness, especially in Europe, could quickly undermine International Paper’s turnaround expectations and margin forecasts.

Find out about the key risks to this International Paper narrative.

Build Your Own International Paper Narrative

Of course, if you’d rather draw your own conclusions or want a different perspective, you can build your own story using the available figures in under three minutes. Just Do it your way.

A great starting point for your International Paper research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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.

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