Citi Reiterates Buy Rating on International Paper (IP)

Citi analyst Anthony Pettinari reiterated a Buy rating and $60.00 price target on International Paper (NYSE: IP)

The analyst comments "At IP’s investor day, its first since 2012, CEO Andy Silvernail and team provided a convincing framework to potentially triple EBITDA from '24 to '27 following the acquisition of DS Smith. '25 is off to a good start with EBITDA guidance a bit better than we expected ($3.5-$4.0B vs. $3.7B cons.). IP forecasts nearly doubling legacy EBITDA by achieving $1.2B cost out net of inflation & $800mm commercial improvement to reach $3.7-$4.0B EBITDA without any contribution from GCF, which IP expects to sell. DS Smith will add $1.1B EBITDA near-term and generate $600-$700mm in synergies by '27, with contributions to both regions. Near-term FCF generation is depressed ($100-$300mm guide) as IP expects to reinvest in the business & restructure, although net leverage remains reasonable at 2.7x (vs. 2.5-2.8x LT range) and doesn't include potential proceeds from GCF. PF valuation looks more compelling after the investor day and we reiterate Buy."

For an analyst ratings summary and ratings history on International Paper click here. For more ratings news on International Paper click here.

Shares of International Paper closed at $56.26 yesterday.

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