Buckingham Research Upgrades International Paper (IP) to Accumulate

July 16, 2008 10:37 AM EDT

Buckingham Research upgrades International Paper (NYSE: IP) from Neutral to Accumulate. Price target $30.

Buckingham analyst says, "Upgrade to Accumulate as improving margins at its much beefed-up containerboard operations should drive cash flow generation to near multi-year highs in the quarters ahead while weakness in the stock has created an attractive entry point from a valuation perspective...Success on the July containerboard price hike will be a huge plus for IP and may coincide with a tipping point as producers seem increasingly focused on making money rather than paper...We think management has done a good job repositioning the product mix during the last few years – establishing a market leading position in containerboard and growing its international papermaking presence while honing its profitable but secularly challenged domestic uncoated freesheet business...The dividend is yielding an all-time high 4.5% which should begin to attract income-oriented
accounts – not historically a mainstay of IP’s ownership – and provide some downside protection."

International Paper Company (International Paper) is a global paper and packaging company that is complemented by an extensive North American merchant distribution system, with primary markets and manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa.

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