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International Paper Co IP

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International Paper Posts Strong Industrial Packaging Growth; Printing Paper Gradually Recovering

Analyst Note

| Brian Bernard, CFA, CPA |

International Paper reported second-quarter results that were mostly in line with our expectations. Sales increased 15% year over year against a soft comparison but were up roughly 5% sequentially. Printing continued its sluggish growth following a difficult 2020, when workers and students were stuck at home. Industrial packing picked up the slack yet again, as strong shipping volumes drove sales in the quarter. We expect to raise our fair value estimate by about 5%, primarily due to increased revenue and margin assumptions in our forecast, slightly offset by the impact of Morningstar's probability-adjusted U.S. corporate tax rate of 26% beginning in 2022.

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Company Profile

Business Description

International Paper manufactures packaging products and printing papers. It accounts for roughly one third of the North American corrugated packaging market and about 25% of the uncoated free sheet paper market. Though it has operations in Brazil, Russia, India, and China, more than three fourths of its sales come from North America.

Contact
6400 Poplar Avenue
Memphis, TN, 38197
T +1 901 419-9000
Sector Consumer Cyclical
Industry Packaging & Containers
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 49,300

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