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Today’s Bear of the Day is a stock caught between cyclical demand weakness, restructuring costs, plant closures, and a major corporate separation. Until I see clearer evidence that earnings power is stabilizing and demand is improving, this looks more like dead money than opportunity.
I’m talking about Zacks Rank #5 (Strong Sell) International Paper ((IP - Free Report) ). While the stock may look “cheap” on the surface after a brutal selloff, there are too many moving pieces here for me to get comfortable.
First, the stock has simply been under pressure. Shares are still sitting roughly 36% below their 52-week high, even after a recent bounce. That kind of technical damage usually tells you institutions are still distributing shares, not accumulating them.
Then there’s the earnings picture. The company posted a massive 2025 loss driven by goodwill impairment and restructuring charges, and while management is pointing investors toward adjusted EBITDA targets for 2026, the market is clearly not fully buying the turnaround yet.
The bigger issue? Demand softness. Box shipments and packaging demand have weakened on both sides of the Atlantic as consumer spending slows and industrial activity remains uneven. That’s a problem for a capital-intensive business that depends on volume leverage. If volumes stay soft, margin recovery becomes much harder.
That’s the reason why analysts have cut estimates for both the current year and next year over the last thirty days. Three analysts have dropped current year numbers while one has done so for next year. That’s dropped the Zacks Consensus Estimate for the current year from $2.51 to $1.85 while next year’s number is off from $3.58 to $3.04.
The Paper and Related Products industry sits in the Bottom 3% of our Zacks Industry Rank. Right now, there are zero stocks in that industry which are in the good graces of our Zacks Rank. However, there are a few names that are at least neutral. These include Zacks Rank #3 (Hold) stocks Mercer International ((MERC - Free Report) ) and Smurfit Westrock ((SW - Free Report) ).
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Bear of the Day: International Paper (IP)
Today’s Bear of the Day is a stock caught between cyclical demand weakness, restructuring costs, plant closures, and a major corporate separation. Until I see clearer evidence that earnings power is stabilizing and demand is improving, this looks more like dead money than opportunity.
I’m talking about Zacks Rank #5 (Strong Sell) International Paper ((IP - Free Report) ). While the stock may look “cheap” on the surface after a brutal selloff, there are too many moving pieces here for me to get comfortable.
First, the stock has simply been under pressure. Shares are still sitting roughly 36% below their 52-week high, even after a recent bounce. That kind of technical damage usually tells you institutions are still distributing shares, not accumulating them.
Then there’s the earnings picture. The company posted a massive 2025 loss driven by goodwill impairment and restructuring charges, and while management is pointing investors toward adjusted EBITDA targets for 2026, the market is clearly not fully buying the turnaround yet.
The bigger issue? Demand softness. Box shipments and packaging demand have weakened on both sides of the Atlantic as consumer spending slows and industrial activity remains uneven. That’s a problem for a capital-intensive business that depends on volume leverage. If volumes stay soft, margin recovery becomes much harder.
International Paper Company Price and Consensus
International Paper Company price-consensus-chart | International Paper Company Quote
That’s the reason why analysts have cut estimates for both the current year and next year over the last thirty days. Three analysts have dropped current year numbers while one has done so for next year. That’s dropped the Zacks Consensus Estimate for the current year from $2.51 to $1.85 while next year’s number is off from $3.58 to $3.04.
The Paper and Related Products industry sits in the Bottom 3% of our Zacks Industry Rank. Right now, there are zero stocks in that industry which are in the good graces of our Zacks Rank. However, there are a few names that are at least neutral. These include Zacks Rank #3 (Hold) stocks Mercer International ((MERC - Free Report) ) and Smurfit Westrock ((SW - Free Report) ).