International Paper (IP): Assessing Valuation as Facility Closures Signal Bold Operational Shift

International Paper (IP) is set to close its packaging facilities in Compton, California, and Louisville, Kentucky, by January 2026. This move is part of the company’s broader transformation to streamline its operations and focus investments.

See our latest analysis for International Paper.

Despite International Paper’s latest move to streamline operations, the stock has faced persistent pressure. Its share price is down nearly 26% year-to-date, and one-year total shareholder return sits at -29.8%. Longer-term investors have still seen positive results, with a 21.5% total return over three years. However, momentum has faded significantly in recent months as the company recalibrates its strategy and investors weigh the risks and rewards of ongoing transformation.

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With the stock trading at a notable discount to analyst targets and broad transformation efforts underway, investors now face a key question: is International Paper undervalued, or is the market already pricing in any potential turnaround?

Most Popular Narrative: 16.5% Undervalued

International Paper’s last close at $39.36 is well below the most widely followed fair value estimate of $47.16. There is an opportunity to explore the reasoning behind this valuation gap.

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.

Want to unlock why analysts are betting on a major margin turnaround and a different profit profile? The full narrative reveals the bold assumptions powering that big fair value. This story could change how you see traditional packaging. Ready to see what really moves the stock? Dive deeper and discover what numbers really drive this valuation.

Result: Fair Value of $47.16 (UNDERVALUED)

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

However, persistent mill reliability issues and uncertain demand in key markets could still challenge International Paper’s turnaround and put pressure on future margin gains.

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

Build Your Own International Paper Narrative

If you see things differently or want to back your own perspective with real data, you can build a unique take in just a few minutes. Do it your way

A great starting point for your International Paper research is our analysis highlighting 4 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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