NEW YORK (
-- International Paper Company
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, good cash flow from operations, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.
Highlights from the ratings report include:
- INTL 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, INTL PAPER CO reported lower earnings of $1.47 versus $1.56 in the prior year. This year, the market expects an improvement in earnings ($2.70 versus $1.47).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Paper & Forest Products industry and the overall market on the basis of return on equity, INTL PAPER CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Net operating cash flow has significantly increased by 223.27% to $514.00 million when compared to the same quarter last year. In addition, INTL PAPER CO has also vastly surpassed the industry average cash flow growth rate of 95.42%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- IP's revenue growth has slightly outpaced the industry average of 9.6%. Since the same quarter one year prior, revenues slightly increased by 10.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
International Paper Company operates as a paper and packaging company with operations in North America, Europe, Latin America, Russia, Asia, and north Africa. Its Industrial Packaging segment manufactures containerboards. The company has a P/E ratio of 20.3, equal to the average consumer non-durables industry P/E ratio and above the S&P 500 P/E ratio of 17. International has a market cap of $13.1 billion and is part of the
industry. Shares are up 11.9% year to date as of the close of trading on Thursday.
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