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Investing.com - JPMorgan downgraded International Paper (NYSE:IP) from Overweight to Neutral on Tuesday, while slightly lowering its price target to $54.00 from $55.00. According to InvestingPro data, the stock is currently trading near its 52-week low of $43.27, with a significant 15.4% decline in the past week alone.
The downgrade follows International Paper’s disappointing quarterly earnings report, which missed JPMorgan’s EBITDA expectations by approximately 4%. The firm noted particular weakness in the company’s EMEA (Europe, Middle East, and Africa) segment. Despite recent challenges, InvestingPro analysis shows the company maintains a 55-year track record of consistent dividend payments, currently yielding 4%.
Despite the earnings miss, JPMorgan observed that International Paper achieved higher-than-expected prices in the second quarter. This suggests the company’s earnings for the remainder of the year will depend more heavily on cost savings rather than lagged realizations of previous linerboard price increases.
JPMorgan’s revised fiscal year 2025 estimate now falls approximately 1% below the low end of International Paper’s own guidance of $3.5 billion EBITDA, including GCF (Global Cellulose Fibers). The firm also highlighted investor doubts about International Paper’s 2027 guidance range following the results.
The stock has declined approximately 17% since the earnings release, with JPMorgan citing concerns that near- and medium-term expectations remain too optimistic. While the firm acknowledged positive industry factors like improving U.S. market supply and discipline, it noted these benefits would apply to International Paper’s competitors as well. Based on InvestingPro’s Fair Value analysis, the stock appears fairly valued at current levels. Subscribers can access 8 additional ProTips and a comprehensive analysis of International Paper’s financial health and market position through the Pro Research Report.
In other recent news, International Paper reported its Q2 2025 earnings, which revealed a significant miss in earnings per share (EPS). The company posted an EPS of $0.20, falling short of the anticipated $0.39, which represents a 48.72% negative surprise. Despite this, the company exceeded revenue expectations, reporting $6.77 billion compared to the forecasted $6.57 billion. These results have drawn attention from investors and analysts alike. The earnings miss was a key factor in the company’s recent developments. Additionally, the revenue performance provided a contrasting positive note amid the earnings disappointment. The mixed earnings report has prompted discussions among analysts about the company’s future performance. Investors are keenly observing these updates to gauge potential impacts on the company’s strategy and operations.
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