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Investing.com - International Paper (NYSE:IP), a prominent player in the Containers & Packaging industry with a market capitalization of $22.8 billion, remained stable following a Jefferies report highlighting steady containerboard prices and box demand in the U.S. market. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics.
Containerboard prices were unchanged in September for the seventh consecutive month, according to the report, though spot discounts persisted for recycled grades with 15-20% of open market participants seeing lower prices. Mill backlogs edged up to 4.0-5.0 weeks versus 4.0-4.5 weeks in August. The company’s financial stability is reflected in its 14-year track record of consistent dividend payments, currently yielding 3.93%. Discover more insights about International Paper’s financial health and growth potential with a InvestingPro subscription, which includes access to detailed Pro Research Reports.
International Paper’s closure of its Savannah and Riceboro, Georgia mills is expected to be completed by the end of September, part of broader industry asset rationalization that Jefferies views as supportive of margins. Industry contacts surprisingly expect more closures of older, less efficient mills by year-end. With total revenue of $30.81 billion in the last twelve months and a solid current ratio of 1.45, the company maintains a strong financial position despite industry challenges.
Box shipments remained flat month-over-month in September, with most boxmakers reporting no meaningful change on a daily basis from August. At least one large integrated producer saw a mid-single-digit percentage year-over-year increase for July-August, though most industry contacts remain uncertain about a potential holiday-driven uptick in box demand this year.
Boxboard prices across all categories were unchanged month-over-month in September, though participants described demand as weak. Solid bleached sulfate (SBS) demand is only slowly improving with some optimism for the fourth quarter as order volumes trend up and inquiries increase, but the market remains oversupplied with operating rates in the low-80s.
In other recent news, UBS has initiated coverage on Smurfit Westrock with a Buy rating, setting a price target of $60.00. The investment bank highlighted an undervalued turnaround opportunity within the company. UBS noted that Smurfit Westrock trades at about 6.4 times its estimated 2026 EV/EBITDA. This is in contrast to its peers, such as International Paper and Packaging Corporation of America, which trade at approximately 8 to 10 times. UBS also mentioned the potential for higher free cash flow yields for Smurfit Westrock. These developments come as part of UBS’s latest analysis and projections.
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