NEW YORK (TheStreet) -- Shares of International Paper (IP) were falling 2.9% to $49.67 on heavy trading volume after analyst firm Macquarie lowered its price target for the packaging and container company.
Macquarie lowered its price target for International Paper to $48 from $54 in a note to investors about containerboard makers. Analyst Al Kabili said it is difficult to get excited about containerboard stocks as there is a risk that margins and earnings may have peaked in the current cycle, according to Street Insider.
"On Friday evening, PPW published a $20/ton price cut on medium prices and more importantly a $10/ton price cut on linerboard US West price indices due to competitive conditions in California," Kabili wrote. "While we had specifically not been expecting the published price cut (particularly for linerboard), we had noted the containerboard market has been looser than it has been in years and we were concerned of mounting pressures, heightened competitive activity, and some areas of price weakness that we had been hearing about."
About 6.1 million shares of International Paper were traded by 3:09 p.m. Monday, above the company's average trading volume of about 2.9 million shares a day.
Insight from TheStreet's Research Team:
International Paper is a core holding of the TrifectaStocks.com portfolio. During the most recent weekly roundup, this is what Bryan Ashenberg and Bob Lang, Portfolio Co-Managers, had to say about the stock:
International Paper (IP:NYSE, 288 shares, 3.95%) shares managed to eke out a fractional gain this week on little company-specific news. The company's strong dividend yield and its active share repurchase program, supported by its robust free cash flow generation, continue to mitigate downside from current levels. We believe improved economic conditions could fuel upside, though pricing trends must be continually monitored. Our price target is $60.