Citi Upgrades International Paper (IP) to Buy

Citi upgraded International Paper (NYSE: IP) from Neutral to Buy.

Analyst Anthony Pettinari comments "Over the past week we’ve seen a number of datapoints that lead us to believe a containerboard price hike is highly likely, either announced around Feb 1 or Mar 1. Accordingly we’re raising est. for the containerboard group to reflect a $40/ton hike implemented in 2H ’17, partly offset by marked-to-market nat gas & OCC. With our updated assumptions our EPS est. rise ~3% in ’17 & ~6% in ’18 and we are solidly above consensus. Thematic Trump trade provides a second leg – In addition to price improvement, we see the group potentially benefitting from new administration policies including tax cuts (possible mid-single digit EPS upside), fiscal stimulus, rising rates & a more relaxed attitude towards antitrust. While IP’s current trading multiple is elevated relative to its history, its discount to the S&P has not narrowed despite a significantly improved return profile & market structure."

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 $57.99 yesterday.

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