International Paper (IP) Stock Forecast & Price Target

International Paper has demonstrated significant improvements in sustainability, with the percentage of purchased fiber certified rising from 26.0% in 2010 to 38.3% in 2019, indicating a commitment to responsible sourcing practices. The company is also enhancing its operational efficiency through initiatives such as the regional optimization of box plants, which have yielded productivity gains, and aims to expand these improvements to an additional 22 plants this year. Moreover, International Paper's focus on free cash flow generation and a strategic capital allocation plan is expected to position the company favorably for transformational growth, particularly as it anticipates stabilizing earnings per share trends and potential acceleration in the second half of 2025.

The negative outlook on International Paper's stock is primarily driven by a significant decline in daily box shipments, which fell 11% year-over-year, highlighting continued challenges in volume due to contract restructuring and diminished export activity. Additionally, North American revenue of $3,539 million and Adjusted EBITDA of $433 million were both below forecasts, reflecting the adverse impact of lower volumes and weakened demand across key markets, particularly in containerboard and fluff pulp sectors. Furthermore, several downside risks, including increased input cost volatility and greater leverage, raise concerns about the company's ability to effectively manage pricing and control costs, potentially undermining financial performance in the near term.