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.