Why International Paper (IP) Stock Is Down Today

NEW YORK (TheStreet) -- International Paper  (IP) fell Tuesday after Macquarie downgraded the company to "neutral" from "outperform" and reduced its price target to $54 from $58. 

The stock was down 2.62% to $47.08 at 3:14 p.m.

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Separately, TheStreet Ratings team rates INTL PAPER CO as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate INTL PAPER CO (IP) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • INTL PAPER CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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 increased its bottom line by earning $3.01 versus $1.71 in the prior year. This year, the market expects an improvement in earnings ($3.55 versus $3.01).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. 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 outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.8%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, IP has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • The gross profit margin for INTL PAPER CO is rather low; currently it is at 19.85%. Regardless of IP's low profit margin, it has managed to increase from the same period last year.
  • You can view the full analysis from the report here: IP Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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