Editor's Note: International Paper Co is a Trifecta Stocks holding. If you own, or are thinking of owning IP, you HAVE to sign up for the FREE webinar hosted by TheStreet's fundamental expert Bryan Ashenberg and technical expert Bob Lang. Sign up now!
NEW YORK (TheStreet) -- Global paper and packaging company International Paper (IP - Get Report) was rising 1.6% Thursday to $43.86, erasing losses sustained over the past week as Washington's political impasse spooked Wall Street investors.
International Paper has gained 10% gained this year, constrained by negative earnings revisions, a recent Deutsche Bank downgrade to "hold", and poor weather trends raising hardwood costs. The company is scheduled to report third-quarter earnings before the start to regular trading on October 24.
Trifecta Stocks' Bryan Ashenberg and Bob Lang in their latest analysis comment, "Lowered expectations, the company's strong 3.2% dividend yield and its active share repurchase program should mitigate downside from current levels."TheStreet Ratings team rates International Paper Co as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation: "We rate International Paper Co (IP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, revenue growth, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Paper & Forest Products industry average. The net income increased by 93.3% when compared to the same quarter one year prior, rising from $134 million to $259 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.7%. Since the same quarter one year prior, revenues slightly increased by 3.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- International Paper Co reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, International Paper Co reported lower earnings of $1.71 a share vs. $2.94 a share in the prior year. This year, the market expects an improvement in earnings ($3.25 vs. $1.71).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Paper & Forest Products industry and the overall market, International Paper Co's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: IP Ratings Report