Goldman Sachs Has Buy Rating On International Paper (IP)
Goldman Sachs has a Buy rating on shares of International Paper Company (NYSE: IP) on stronger than expected paper prices.
In a note to clients, Goldman Sachs writes, "We view the $40 containerboard price increase as a positive, as producers realized the majority of the announced $60 increase despite concerns of a slowing US economy in 2H2010. Based on conversations with investors, the $40 increase is in line with expectations. Although we had yet to factor in the August price increase into our forecasts, we believed there was a high probability that the majority of the increase would be realized given
the tight industry supply/demand fundamentals (see “July box data softer than expected, but August price hike still likely” published 17 August 2010).
Based on the reported price increase, we see upside to our 4Q2010 and 2011 EPS estimates for containerboard producers, International Paper (IP, Buy, $21.21), Boise (BZ, Buy, $6.84), Temple-Inland (TIN, Neutral, $17.43),
and Packaging Corp (PKG, Neutral, $23.06)."
Shares of International Paper closed at $21.21 on Friday.
