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On Thursday, JPMorgan initiated coverage on International Paper (NYSE:IP) shares, assigning an Overweight rating and setting a price target at $59.00. The firm’s analysis indicates that International Paper, the leading corrugated containerboard and box producer in the United States, with a market capitalization of $27.7 billion, is poised for a significant increase in profitability under the direction of new CEO Andy Silvernail. According to InvestingPro data, the company currently trades at a P/E ratio of 33.1x, though this appears justified given expectations for strong earnings growth.
Silvernail’s strategy is expected to double the company’s EBITDA from its current level of $2.03 billion to $4 billion in the medium term, partly through the integration of DS Smith, which expands International Paper’s footprint in Europe. With annual revenue of $18.6 billion and a 55-year track record of consistent dividend payments, as highlighted by InvestingPro, the company has demonstrated strong operational stability. JPMorgan’s report discusses the potential for International Paper’s 80/20 strategy to streamline operations and enhance profitability, the implications for the US corrugated market, long-term consolidation opportunities in Europe, the achievability of the $4 billion EBITDA target, and the company’s capacity to return value to shareholders.
The report also places International Paper on a positive watchlist ahead of the company’s Capital Markets Day scheduled for March 25. Despite the positive outlook for International Paper, JPMorgan maintains that their top pick in the sector is Smurfit Westrock (NYSE:WRK), which trades at a roughly 25% discount compared to International Paper and is also rated Overweight, a valuation gap considered by the firm as unjustified.
JPMorgan’s assessment relies on a free cash flow and Sum of the Parts (SotP) analysis to derive the June 2026 price target of $59 per share for International Paper. This initiation comes as the company embarks on a transformative path that could reshape its market position and financial performance in the coming years. For a comprehensive analysis of International Paper’s valuation and growth prospects, investors can access detailed financial metrics and 10 additional ProTips through InvestingPro’s exclusive research report.
In other recent news, International Paper has become the guarantor for its subsidiary DS Smith Limited’s outstanding notes, following amendments approved during meetings with note holders. These amendments were aimed at providing more flexibility within the group and include a guarantee for DS Smith’s payment obligations. Meanwhile, Citi analysts have reinstated coverage on International Paper, assigning a Buy rating and setting a price target of $60. Analysts from Citi project substantial earnings growth for the company, driven by cost reductions and synergies from the DS Smith acquisition.
In another development, International Paper announced the permanent closure of four U.S. facilities by the end of April 2025, affecting 674 employees. This decision is part of the company’s strategic transformation to enhance its sustainable packaging solutions. Additionally, S&P Global Ratings has upgraded DS Smith’s credit ratings following the acquisition by International Paper, aligning them with the parent company’s ratings. Lastly, International Paper has appointed David Robbie to its Board of Directors, bringing his extensive finance and corporate experience to the company. Robbie’s previous role at DS Smith and his financial expertise are expected to be valuable assets for International Paper’s growth.
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